W. R. Berkley Annual Report 2022

← All annual reports

FY2022 Annual Report · W. R. Berkley

Loading PDF…

LOOK

W. R . B e r k l e y C o r p o r a t i o n

2 0 2 2 A N N U A L R E P O R T

I F Y O U

D O N ’ T

L O O K ,

Y O U

W O N ’ T

S E E .

1 W. R. Berkley Corporation Evening Shadows, Maxfield Parrish

W. R . B e r k l e y C o r p o r a t i o n

2 0 2 2 A N N U A L R E P O R T

2 W. R. Berkley Corporation CONTENTS

Financial Highlights

Segment Overview

Letter to Shareholders

Segment Data

Selected Financial Data

Investments

Form 10-K

165 Businesses

174 Board of

Directors & Officers

176 Corporate Information

W. R. Berkley Corporation
Performance vs. S&P 500

Relative Stock
Price Performance

Risk Before Return

Decentralization:
A Competitive Advantage

Valuing Our People

27 Our Company

28 Our Business

1 W. R. Berkley Corporation

Evening Shadows, Maxfield Parrish

• Our clear objective has always been to maximize

our long-term risk-adjusted return, which
necessitates not only understanding our current
exposures, but also anticipating what impacts
the constantly changing environment can have
on future exposures and maintaining a keen
awareness of the risks from unforeseen events.

• As a specialty company with a decentralized
structure, we are close to our customers and
better able to understand their needs, provide
customized, innovative solutions and make
decisions quickly.

• We build our businesses around teams with
knowledge and expertise and invest in their
ongoing development. Many of our colleagues
at our businesses have been with the Company
for the majority of their careers or since the
establishment of their operating unit.

• Our key incentive compensation plan, which

requires managers to hold our stock as long as they
are with the Company, means that management
is in it for the long term and fully aligned with
shareholders’ interests.

Over the long term, we have focused on creating
shareholder value by building outstanding
teams of people and meeting the needs of our
customers, all the while recognizing that we have
an obligation to society. All of these activities are
important contributors to our Company culture,
which emphasizes that everything we do and
every person who participates is important to our
enterprise, and that always doing the right thing is
the cornerstone of our success.

IF YOU
DON’T LOOK,
YOU WON’T
SEE.

When you opened the cover, you may have
thought you saw all there was to see—a lovely
mountain scene. Maybe you even noticed the
little church nestled in the middle. But look more
closely, and you’ll see an entire village secluded
behind the trees.

Most people think insurance companies are all
the same, but you have to really look closely at a
company to see why it is different or special, or,
conversely, why the risk is not as easy to assess as
it appears on the surface.

Look carefully at our Company and you will see
some of the things that make us special.

2 W. R. Berkley Corporation 2022 Annual Report 22022
FINANCIAL
HIGHLIGHTS

By taking advantage of challenging opportunities and bringing
together talented people and capital, we feel confident that we will
be able to continue to deliver outstanding long-term returns.

3 W. R. Berkley Corporation C O M B I N E D R AT I O

Averaged 92.6% over the past 5 years

89.3%

T O TA L R E V E N U E S

Increased by 45.3% over the past 5 years

$11.2B

R E T U R N O N STO C K H O L D E R S ’ EQ U I T Y

Averaged 14.0% over the past 5 years

20.8%

B O O K VA LU E P E R S H A R E

Grew 55.0% before dividends and share
repurchases over the past 5 years

$25.51

4 W. R. Berkley Corporation 2022 Annual Report 4TO OUR
SHAREHOLDERS

I F Y O U

D O N ’ T L O O K ,

Y O U W O N ’ T

S E E

2022 was truly an outstanding year for

W. R. Berkley Corporation. No
matter what the measure used, this was a year for
the record books. The results were a consequence
of many decisions made over an extended period of
time by all team members
throughout the Company.
As always, our primary
target is to optimize our
risk-adjusted return.

“ No matter
what the
measure used,
this was a
year for the
record books.”

We focused first and
foremost on continuing
to improve underwriting
results. We did this
by examining each line of business, reducing
expenses, and growing in our most profitable
areas. Simultaneously, we took advantage of our
assessment of the ongoing inflationary trends and
positioned our fixed income portfolio with a short

L E F T T O R I G H T :

W. Robert Berkley, Jr.
President and Chief Executive Officer

William R. Berkley
Executive Chairman

duration and high credit quality, which protected
our balance sheet from the mark-to-market impact
of increasing interest rates. Our common stock
portfolio performed exceptionally well with the
market being down approximately 20% and our
portfolio being up approximately 10%. Our private
equity investments also performed well, as did
our real estate investments. We reported record
premiums and all-time record earnings. Our return
on capital exceeded 20%. It was an exceptional
outcome in a challenging year. Our entire team is
proud of what we accomplished.

6 W. R. Berkley Corporation 2022 Annual Report 6TO OUR
SHAREHOLDERS

T O TA L R E V E N U E S
(dollars in billions)

2 0 1 8

2 0 1 9

2 0 2 0

2 0 2 1

2 0 2 2

I N V E S T M E N T S
(dollars in billions)

2 0 1 8

2 0 1 9

2 0 2 0

2 0 2 1

2 0 2 2

$7.7

$7.9

$8.1

$9.5

$11.2

$17.7

$18.5

$22.2

$22.9

R E C O R D
U N D E RW R I T I N G I N C O M E

$1.0B

R E C O R D N E T I N C O M E

$1.4B

These outcomes are the result of the effort and
commitment of our team. They do not just happen.
It starts with us examining our view of the economy
and the world. Social trends are an important

“ These

outcomes are
the result of
the effort and
commitment of
our team. They
do not just
happen.”

part of this process as
well as financial trends.
Unfortunately, historically,
our industry has spent
most of its time looking
backward. By looking at
financial statements, we
are focused on the rearview
mirror rather than looking
out the front windshield
and extrapolating into
the future. While we pay

attention to the past, each of our businesses and
everyone at the holding company is looking forward
in assessing the accuracy of our past prognostications,
all in order to better understand, anticipate, and plan
for the future. The cornerstone of our structure is
that each of our businesses does this from its own
unique perspective. As the industry has become
less uniform in its cyclicality and has become more
statistically driven by line of business, the benefits
of the expertise in our decentralized model have
become even more important.

We do not only examine our business by line. We also
look at how all the various external factors interact
with that specific line of business in each industry
or specialty niche that we serve. Accordingly, we
carefully note how trends interact with each line of
business’s prior reserves in order to be sure that what
we see in the rearview mirror is an accurate portrayal
of what was actually happening.

We take this data, our knowledge and experience,
and begin to build our strategic plan. We always
start with our risk-adjusted return goal of 15%. This
target is what we think is an appropriate return to our
shareholders. It is made up of underwriting profits,
investment income, and investment gains and losses.
Each of these is assessed with what we perceive as
an eye toward assessing the appropriate risk for the
generation of income in every area of the business.

7 W. R. Berkley Corporation Generally speaking,
organically starting
up new businesses or
expanding some of
our existing operations,
as opposed to
purchasing someone
else’s business, is
a more attractive
alternative from a
risk-adjusted return
perspective.”

We establish targets for rate increases by line of
business to be sure that the rate we charge allows
us to at least maintain our profit margins, no matter
how competitive the environment. All returns
are not created equal, and we recognize that rate
changes must always reflect changes in the risk
profile of each individual line of business. No matter
what the environment, our goal is to always offer
an appropriately priced product. The better our
assessment of profit margin, the faster we would
like to grow. As long as there is an adequate risk-
adjusted return, we want to grow as fast as possible.

There are times during this process that we find
market opportunities that we do not currently
address. Consequentially, we will expand some of
our existing operations or search for new teams to
create a business to optimize these opportunities.
Generally speaking, organically starting up new
businesses or expanding some of our existing
operations, as opposed to purchasing someone
else’s business, is a more attractive alternative
from a risk-adjusted return perspective. It does
require patience, and from a financial reporting

point of view, it results in delayed gratification.
However, in the long term, it is financially more
attractive, even though it may not look that way
for a couple of years. This year, we started three
new businesses, bringing the total number to 59.
Every year circumstances arise to allow us to find
such opportunities.

Our investment returns were also outstanding in
2022. We positioned ourselves at the beginning
of the year to reflect our concerns about inflation
and concomitant rising interest rates. We also
moved our common stock portfolio to a defensive
position. Simultaneously, with all of this activity,
we ensured that the quality of our fixed-maturity
portfolio was maintained at AA- to minimize
adverse consequences in the event of a recession.

8 W. R. Berkley Corporation 2022 Annual Report 8TO OUR
SHAREHOLDERS

R E S E R V E S F O R LO S S E S
A N D LO S S E X P E N S E S
(dollars in billions)

2 0 1 8

2 0 1 9

2 0 2 0

2 0 2 1

2 0 2 2

$12.0

$12.6

$13.8

$15.4

$17.0

C O M M O N S T O C K H O L D E R S ’ E Q U I T Y *
(dollars in billions)

2 0 1 8

2 0 1 9

2 0 2 0

2 0 2 1

2 0 2 2

$5.4

$6.1

$6.3

$6.7

* Net of $1.4 billion in special dividends and shares
repurchased from 2018 to 2022

N E T P R E M I U M S W R I T T E N

$10.0B

N E T I N V E S T M E N T I N C O M E

$779.2M

Our assessments proved to be fortuitous. Interest rates
went up substantially with an inverted yield curve, but
because of our portfolio’s position, we did not suffer

“ The overall

result was that
our investment
portfolio,
both in terms
of investment
income and
capital gains,
delivered
exceptional
results.”

consequential capital
losses. Our common
stocks appreciated while
the market depreciated
and our cash flow and
short-duration portfolio
allowed us to reinvest at
substantially higher rates.

We realized additional
gains with the sale of
significant real estate
holdings in the UK and
the USA. The overall
result was that our

investment portfolio, both in terms of investment
income and capital gains, delivered exceptional results.

The facts for 2022 were extraordinary: a return
on equity of 20.8%; record underwriting income
of $1 billion; and net income of $1.4 billion. Net
premiums written grew 12.9% to $10 billion. Net
investment income grew 16% to a record $779.2
million and operating cash flow was approximately
$2.6 billion. It was, as you can see, a fabulous year.
We are optimistic about 2023.

We want to thank our Board members for their constant
support in these extremely uncertain times. We could
not have achieved these results without the support of
our agents and brokers with whom we work day to
day to help meet our customers’ needs. We also thank
our shareholders for their support during this highly
uncertain economic period. The efforts of our entire
team were critical in achieving the results of 2022. We
both express our sincerest thanks to the team and all
the other contributors to this year’s outstanding results.

William R. Berkley
Executive Chairman

W. Robert Berkley, Jr.
President and Chief Executive Officer

9 W. R. Berkley Corporation SELECTED
FINANCIAL DATA

In thousands, except per share data

YEARS ENDED DECEMBER 31,

2018

2019

2020

2021

2022

Total Revenues

$7,691,651

$7,902,196

$8,098,925

$9,455,466

$11,166,499

Net Premiums Written

6,433,227

6,863,499

7,262,437

8,862,867

10,004,070

Net Investment Income

674,235

645,614

583,821

671,618

779,185

Net Investment Gains

154,488

120,703

103,000

90,632

202,397

Insurance Service Fees

117,757

92,680

88,777

93,857

110,544

Net Income to Common Stockholders

640,749

681,944

530,670

1,022,490

1,381,062

NET INCOME PER COMMON SHARE

Basic

Diluted

Return on Equity

AT YEAR END

Total Assets

$2.25

$2.38

$1.89

$3.69

$4.99

2.22

11.8%

2.35

12.5%

1.87

8.7%

3.66

4.94

16.2%

20.8%

$24,895,977

$26,643,428

$28,606,913

$32,086,414

$33,861,099

Total Investments

17,723,089

18,473,674

18,481,767

22,171,814

22,859,646

Reserves for Losses and Loss Expenses

11,966,448

12,583,249

13,784,430

15,390,888

17,011,223

Common Stockholders’ Equity

5,437,851

6,074,939

6,310,802

6,653,011

6,748,332

Common Shares Outstanding

274,491

275,118

266,738

265,172

264,546

Common Stockholders’ Equity Per Share

19.81

22.08

23.66

25.09

25.51

Per share data and common shares outstanding have been adjusted for the 3-for-2 common stock splits effected on April 2, 2019 and March 23, 2022.

10 W. R. Berkley Corporation 2022 Annual Report 10W. R. BERKLEY CORPORATION PERFORMANCE VS. S&P 500®

Cumulative Total Stock Return (Includes Dividends)

Notes: W. R. Berkley Corporation’s stock price has been adjusted for stock dividends paid from 1975 to 1983. Stock dividends were 6% in each year from
1975 to 1978, 14% in 1979, and 7% in each year from 1980 to 1983. The Company has paid cash dividends each year since 1978. Dividends have been compounded
for W. R. Berkley Corporation.

11 W. R. Berkley Corporation W. R. Berkley Corporation S&P 500 DifferenceYear(1) (2) (1)-(2)1974-43.2%-26.4%-16.8%1975-38.7%1.0%-39.7%19760.5%24.8%-24.4%1977151.5%15.6%135.9%1978499.1%23.0%476.1%1979430.4%45.4%385.0%1980436.8%92.3%344.5%1981601.6%82.7%518.9%1982610.8%121.8%489.0%1983900.1%171.5%728.7%19841,010.3%188.0%822.3%19852,543.6%279.0%2,264.6%19862,940.8%349.5%2,591.3%19872,708.1%372.5%2,335.6%19883,398.4%450.9%2,947.5%19894,727.3%625.5%4,101.8%19904,450.5%603.0%3,847.4%19915,516.5%817.4%4,699.1%19927,896.1%887.2%7,008.9%19936,472.1%986.9%5,485.2%19947,009.4%1,001.0%6,008.4%199510,186.7%1,415.0%8,771.7%19969,722.4%1,763.4%7,958.9%199712,779.3%2,385.8%10,393.4%199810,024.5%3,096.8%6,927.8%19996,241.9%3,768.1%2,473.9%200014,552.3%3,416.1%11,136.2%200116,766.9%2,997.7%13,769.2%200218,744.0%2,313.1%16,430.9%200325,051.7%3,005.6%22,046.0%200434,067.7%3,344.2%30,723.6%200551,914.6%3,512.9%48,401.7%200656,702.5%4,083.8%52,618.7%200749,282.8%4,313.9%44,968.9%200851,709.6%2,680.7%49,028.8%200941,500.0%3,417.6%38,082.4%201046,596.4%3,948.8%42,647.6%201159,135.3%4,033.8%55,101.5%201267,184.0%4,695.2%62,488.8%201377,952.3%6,248.9%71,703.4%201494,842.7%7,118.1%87,724.6%2015102,211.3%7,217.7%94,993.6%2016127,530.0%8,095.8%119,434.2%2017140,524.3%9,884.9%130,639.4%2018148,906.2%9,447.6%139,458.6%2019214,214.4%12,454.1%201,760.3%2020207,457.2%14,764.1%192,693.1%2021264,190.1%19,030.8%245,159.2%2022353,720.2%15,566.2%338,154.0%Average Annual Gain 1974-202223.7%12.4%11.4%CUMULATIVE TOTAL STOCK RETURN 1974—2022

W. R. Berkley Corporation*

S&P 500®

400,000%

300,000%

200,000%

100,000%

353,720%

15,566%

1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

* Dividends Compounded

CUMULATIVE GROWTH IN BOOK VALUE PER SHARE

(With Dividends Included)

Insurance companies are often measured by book value per share. We have grown book value

per share with dividends included by an average of 16.3% since 1973.

W. R. Berkley Corporation

100,000%

75,000%

50,000%

25,000%

91,274%

1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

12 W. R. Berkley Corporation 2022 Annual Report 12IF YOU DON’T

13 W. R. Berkley Corporation YOU WON’T

14 W. R. Berkley Corporation 2022 Annual Report 14,

K
O
O
L

’

N
O
D

U
O
Y

E
E
S

’

N
O
W

U
O
Y

RISK
BEFORE
RETURN

O V E R T H E L A S T 4 9 Y E A R S

A S A P U B L I C C O M PA N Y :

Average return on equity

14.6%
18.1%

Compound average growth in
total shareholder return

15 W. R. Berkley Corporation

Risk necessarily comes before return in our
measurement of performance, because all risks are
not created equal and you cannot achieve a stable,
long-term return without first focusing on risk.”

T hroughout our history, we have maintained

our focus on long-term risk-adjusted
returns. For us, a long-term measurement of
performance is critical, as in our industry outsized
losses from unforeseen events can introduce
volatility that could negate the value created in
prior periods. No one can predict individual events,
be it a court decision or a storm, but we can use
data and analytics to objectively understand trends
and observe direction. Being a data driven and
analytical company enables us to manage in such a
way that individual events, when they occur, have
less of an adverse impact.

Equally significant is the fact that risk necessarily
comes before return in our measurement of
performance, because all risks are not created
equal and you cannot achieve a stable, long-term
return without first focusing on risk. Our focus
has never wavered regardless of the economic or
underwriting environment.

Look
Our business is all about managing risk. We strive
to control our risk through individual risk selection,
appropriate terms and conditions - including
establishing limits of exposure and determining
the terms of risk through policy wordings - and
spreading risk. We need to have outstanding people
in the right positions, from underwriting and claims
to accounting and investing. We need to purchase
reinsurance tailored to our book of business. We
need to invest in appropriate assets. And we need to
understand how our various exposures interact.

16 W. R. Berkley Corporation 16RISK BEFORE RETURN

Looking at the financial statements of any company
will provide a general picture of how well it has
performed. Yet for a property and casualty insurer,
they only tell part of the story. It is no different than
looking at the picture on our cover, where you don’t
initially see everything. If you look longer, you still
might not notice or understand all of the details. To
truly evaluate the drivers of our performance and
our future outlook, you need to look at performance
over a long period of time - not just five or ten
years, but over fifteen, twenty or more years to span
multiple insurance cycles. You need to understand
the details of how our Company is managed and
how those finer points translate into low volatility,
strong returns and consistent growth in book value
over that period of time.

Every day, we
make small and large
decisions in every
business with a focus
on long-term risk-
adjusted returns.”

See
If you look more closely at Berkley, you will see
that we have been successful for 55 years precisely
because we manage with a focus on risk-adjusted
return. We understand that risks come in all
forms, both from the things we know about and
the things we don’t, and that uncertainty makes
those risks even greater.

We learn from the past through data and analytics,
and we always look to the future. That means
understanding the historical drivers of loss
frequency and severity at a granular level to
assess the nuances of specific lines of business in
different territories or jurisdictions, as well as the
unique characteristics of each industry in which
our clients operate. At the same time, we monitor
economic, social, political and judicial trends
and adjust our strategies in anticipation of the
changing environment’s potential impact on our
future performance.

It also means starting new businesses in sectors
of the economy that we believe are, or have the
potential to become, key contributors to a country’s
gross domestic product, or lines of business that
address emerging risks. Each requires that we start
with the right talent and expertise.

In our investment portfolio, focusing on risk-
adjusted return means blending traditional
security analysis with market and economic
analysis and a view of the future.

17 W. R. Berkley Corporation 1.7%

“ Our book value grew by 1.7% in 2022, while global competitors
lost 10%, 20%, 30% or more of equity.”

a focus on long-term risk-adjusted returns. Our
vision isn’t perfect, but our thoughtful analysis of
our business and the changing world around us has
helped us to produce a 14.6% long-term average
return on equity and an 18.1% compound average
growth in total shareholder return over the last 49
years as a public company.

Understand
To understand how all of these actions impact our
financial statements, one should consider what has
happened when risks have manifested in industry
shock losses and why, throughout our history, we
have experienced a lower level of volatility than
most other property
and casualty companies.

“ Looking at

the financial
statements of
any company
will provide a
general picture
of how well it has
performed. Yet
for a property and
casualty insurer,
they only tell part
of the story.”

Good underwriting, risk
selection and aggregate
exposure management,
combined with strategic
reinsurance purchasing,
has resulted in
our below-average
catastrophe loss
impacts. We shortened
the duration of our
fixed-maturity portfolio,
while maintaining its
high credit quality,

in anticipation of inflation well before it began.
These actions enabled us to maintain our balance
sheet while positioning our investment income
to increase rapidly as interest rates began rising.
Our book value grew by 1.7% in 2022, while global
competitors lost 10%, 20%, 30% or more of equity.
We retrenched from the reinsurance market over
the last 10 years, avoiding significant losses, and
now have the opportunity to profitably deploy
capital as market conditions harden.

These are just a few examples of the good decisions
we have made in recent years. Every day, we make
small and large decisions in every business with

18 W. R. Berkley Corporation 2022 Annual Report 18,

K
O
O
L

’

N
O
D

U
O
Y

E
E
S

’

N
O
W

U
O
Y

DECENTRALIZATION:
A COMPETITIVE
ADVANTAGE

19 W. R. Berkley Corporation

A n insurance enterprise is essentially

made up of two key components – capital
and people. Our decentralized structure
brings talented people together with capital and
puts the decision-making in the hands of those

“ Our

decentralized
structure brings
talented people
together with
capital and puts
the decision-
making in the
hands of those
closest to the
customer.”

closest to the customer.
It is one of our
greatest competitive
advantages. By
empowering our people,
we have developed
a collaborative and
entrepreneurial
culture and a sense
of ownership that
allows us to attract
outstanding people
with knowledge,
expertise and integrity.
As a result, we have

been able to deliver superior underwriting results
and outstanding risk-adjusted returns with below
average volatility over a very long period of time.

Look
On the surface, our decentralized structure may
not seem very different from the operations at
other insurance companies that may organize by
account size or lines of business. We effectively
build complete companies around the type
of expertise needed to excel in specialized
markets. Each individual, regardless of their
role, understands that they are there to serve a
particular type of customer in a specific way.

Our teams are empowered to make decisions
that affect their business, allowing them to identify
and respond quickly and effectively to changing
market conditions.”

20 W. R. Berkley Corporation 2022 Annual Report 20See
Over the years, we have found that bigger is not
necessarily better and that our model delivers
greater customer value. Each of our businesses
provides insurance products and services to

“ By customizing
each of these
functions to their
differentiated
customer bases,
our businesses
bring exceptional
value and better
outcomes to
their clients.”

a distinct customer
base defined by
market, geography,
line of business, or
industry served. This
specialization enables
each team to draw
upon expertise in,
and develop a deep
understanding of, the
unique characteristics
of their clients’ business
and specific lines of
business in different

territories or jurisdictions to best serve their
customers’ needs for coverage, risk management
and claims handling.

By customizing each of these functions to their
differentiated customer bases, our businesses
bring exceptional value and better outcomes to
their clients. It also creates a critical feedback
loop that enables us to continually refine our
underwriting, risk appetite and processes to drive
outstanding results.

Because of their specialized expertise and
autonomous operations, our teams are
empowered to make decisions that affect their
business, allowing them to identify and respond
quickly and effectively to changing market
conditions, emerging loss trends and their
specific customers’ needs. Understanding the
nuances of smaller parts of the market is key
to managing the insurance cycle in which these
distinct markets no longer move in lock-step. It
enables us to effectively emphasize those areas of
the market with the best margin potential and de-
emphasize others and constantly refine the book
of business to optimize profitability, no matter if
the market is hard or soft.

DECENTRALIZATION:
A COMPETITIVE ADVANTAGE

Our people are specialists, not generalists,
meaning that they have narrowly focused expertise
in a product, industry or territory. This operating
model makes it easy to find ways to solve problems
for our customers and to cross-pollinate our deep
knowledge across our various businesses.

A U T O N O M O U S B U S I N E S S E S

59B E R K L E Y I S C O M P R I S E D O F 5 9
+3T H R E E N E W B U S I N E S S E S W E R E

S TA R T E D I N 2 0 2 2

21 W. R. Berkley Corporation 21 W. R. Berkley Corporation Our team members
act with a sense of
ownership, heart
and passion. It has
created a permanent
competitive
advantage that can
only be acquired
over many years.”

Simultaneously, corporate teams centrally manage
the investment portfolio and provide support in
all functional areas as well as in enterprise risk
management, reinsurance purchasing, information
technology, human resources, and legal. These
support structures provide the benefits of a large
organization while allowing the businesses to
maintain focus on their areas of expertise, creating
efficiencies and knowledge sharing. Our corporate
teams also provide strategic and financial oversight
to ensure transparency and accountability.

Each team is responsible for and compensated
based upon their own results, with long-term
incentive compensation for senior leadership
that is based on the same profitability metrics
throughout the enterprise. As a result, the
businesses are operated with an ownership
perspective and clear accountability.

Understand
Our structure allows us to do more than share
knowledge across the organization to help meet
customer needs. It enables us to understand what
is right for our various stakeholders and deliver
better outcomes. For example, our goal in workers’

compensation is to get an injured individual back
to good health and back to work, not to pay as little
as possible. Through decentralization, we empower
our teams to make thoughtful decisions every day,
in every aspect of our business, and do what is
right, while generating strong risk-adjusted returns
that build value over the long term and prepare
us for whatever challenges and opportunities
the future may hold. Our team members act with
a sense of ownership, heart and passion. It has
created a permanent competitive advantage that
can only be acquired over many years.

22 W. R. Berkley Corporation 2022 Annual Report 22,

K
O
O
L

’

N
O
D

U
O
Y

E
E
S

’

N
O
W

U
O
Y

VALUING
OUR
PEOPLE

23 W. R. Berkley Corporation

Many years ago, we trademarked the
phrase ‘Everything Counts, Everyone Matters®’
to encapsulate that mindset and perpetuate
it for future generations.”

F rom the day it was founded, our business

has been about people, and the expertise
they bring to bear in all that we do. Every
action we take makes a difference, from making
strategic decisions to the way we answer the
phones. Many years ago, we trademarked the
phrase “Everything Counts, Everyone Matters®”
to encapsulate that mindset and perpetuate it for
future generations. With that in mind, our biggest
investments in talent have been in developing our
skills and maintaining our culture to allow our
people to grow and thrive.

Look
Like many large organizations, we invest in
our people and their well-being by providing
comprehensive benefits packages tailored to the
various jurisdictions in which our employees are
located, including health, well-being, financial and
professional development benefits. However, we
go beyond those benefits to create an environment
where people feel truly valued for their unique
perspectives and capabilities, and are encouraged
to be the best version of themselves in an
environment of collaboration and collegiality.

See
Look closely at the many activities we undertake
and the stories we tell, and you will see that it is
the thousands of little things we do within our
organization that add up to a culture of excellence
and feelings of loyalty, pride and belonging among
those who call Berkley home.

24 W. R. Berkley Corporation 24VALUING OUR PEOPLE

People generally want to be a valued part of their
team and are motivated by the encouragement and
support of those around them. Providing access
to ongoing education and resources to achieve
professional designations is just the beginning.
We offer internal courses, such as our long-standing
management programs and presidents’ meetings, as
well as more recently developed mentoring, trainee
and innovation leadership programs. Many of these
offerings lead to new opportunities or leadership
roles within our organization.

At our core, our organization embraces innovation,
knowing that the very best ideas are more often
born to those who are closest to the task, the
customer, and their communities. Our formal
Innovation Through People™ program builds
on our entrepreneurial foundation to promote
innovative thinking throughout the organization.

We are extending an invitation to all colleagues
equally to engage in developing behaviors
that foster an innovative mindset, a culture of
creativity and resilience, and tools and structures
for ideation, experimentation and measuring
outcomes.

As important as diversity is to an organization,
it is more than just statistics. We also focus on
inclusion and belonging (“DIB”). Diversity at
Berkley means that each individual is unique and
valued. Inclusion means that we all work together
to create a safe and supportive environment where
all team members are treated fairly, respectfully,
and are encouraged to share ideas and opinions.
Belonging is how an individual feels – it requires
awareness and action focused on bringing people
“in.” To those ends, we regularly introduce new
diversity training, add educational materials in our
online learning system,
provide forums to
share information, and
hold live events to
discuss DIB topics.
We have also
developed an
interview series with
our employees to
recognize various
diversity awareness
celebrations
throughout the year.
By giving a voice
to our employees
and increasing the
availability of learning resources on this topic,
we aim to create a more aware and empowered
workforce with a greater focus not only on
improving our performance, but also on increasing
our sensitivity and strengthening our culture.

“ At our core,
our organization
embraces
innovation,
knowing that the
very best ideas are
more often born
to those who are
closest to the
task, the customer,
and their
communities.”

Ultimately, we strive to be an organization where
“everyone knows your name,” despite our size. We
recognize the achievements of our team members
who complete our development programs, receive
certifications and awards within our innovation
program, reach milestone anniversaries and

25 W. R. Berkley Corporation It’s the thousands of
little things we do within
our organization that
add up to a culture of
excellence and feelings
of loyalty, pride and
belonging among those
who call Berkley home.”

10+

Nearly 70% of Berkley
employees that retired in 2022
had more than 10 years of service

More than 70% of our senior
leadership team has been with the
company for more than 5 years

complete personal accomplishments. Supporting
one another in times of crisis, whether through
connectivity during big events like the COVID-19
pandemic or fundraising and providing moral
support when individual tragedies occur, it is
important for team members to know we have
their backs.

Understand
Diversity goes beyond race, gender, or sexual
orientation. It recognizes that we want all to
belong. As we have become larger, we have
formalized activities that we have engaged in since
our founding to perpetuate our small company feel
inside our global enterprise. We endeavor to create
the feeling that that we know our employees, we
see what makes them individually unique, special
and valuable, and support them. We achieve better
outcomes because we care more and work harder
as a team and are honest with ourselves and others
about reality. This is what has led to successful
outcomes for our stakeholders over many decades.

26 W. R. Berkley Corporation 2022 Annual Report 26OUR COMPANY

W. R. Berkley Corporation, founded in 1967, is one of the nation’s premier
commercial lines property casualty insurance providers. Each of the businesses
within Berkley participates in a niche market requiring specialized knowledge
about a territory or product.

Our competitive advantage lies in our long-term strategy of decentralized operations,
allowing each of our businesses to identify and respond quickly and effectively to
changing market conditions and local customer needs. This decentralized structure
provides financial accountability and incentives to local management and enables us
to attract and retain the highest-caliber professionals.

We have the expertise and resources to utilize our strengths in the present
environment, and the flexibility to anticipate, innovate and respond to whatever
opportunities and challenges the future may hold.

HOW
WE ARE
DIFFERENT

Risk-Adjusted Returns
Management company-wide is focused on
obtaining the best potential returns with a
real understanding of the amount of risk being
assumed. Superior risk-adjusted returns are
generated over the insurance cycle.

Accountability
The business is operated with an ownership
perspective and a clear sense of fiduciary
responsibility to shareholders.

People-Oriented Strategy
New businesses are started when opportunities
are identified and, most importantly, when the
right talent is found to lead a business. Of the
Company’s 59 businesses, 52 were developed
internally and seven were acquired.

Responsible Financial Practices
Risk exposures are managed proactively. A
strong balance sheet, including a high-quality
investment portfolio, ensures ample resources to
grow the business profitably whenever there are
opportunities to do so.

Transparency
Consistent and objective standards are used to
measure performance—and, the same standards
are used regardless of the environment.

27 W. R. Berkley Corporation 27 W. R. Berkley Corporation OUR BUSINESS

Today, as with yesterday and tomorrow, the combined expertise of
underwriting, risk management, claims handling and investing will
deliver outstanding risk-adjusted returns.

I N S U R A N C E
Our Insurance businesses underwrite
predominantly commercial insurance, including
excess and surplus lines, admitted lines, and
specialty personal lines, in the United States, as
well as in the United Kingdom, Continental Europe,
South America, Canada, Mexico, Scandinavia,
Australia and Asia.

R E I N S U R A N C E & M O N O L I N E E X C E S S
Our Reinsurance businesses provide facultative
and treaty reinsurance, primarily in the United
States, United Kingdom, Continental Europe,
Australia, the Asia-Pacific Region and South Africa.
Monoline Excess businesses solely retain risk
on an excess basis.

2022 Results

I N S U R A N C E T O TA L R E V E N U E S

$9.0B

I N S U R A N C E P R E-TA X I N C O M E

$1.5B

R E I N S U R A N C E & M O N O L I N E E X C E S S

T O TA L R E V E N U E S

$1.4B

R E I N S U R A N C E & M O N O L I N E E X C E S S

P R E-TA X I N C O M E

$317M

28 W. R. Berkley Corporation SEGMENT
OVERVIEW

Each of our two business segments—Insurance and
Reinsurance & Monoline Excess—comprise individual businesses
that serve a market defined by geography, products, services or
types of customers.

Our growth is based on meeting the needs of customers,
maintaining a high-quality balance sheet and allocating capital to
our best opportunities.

We combine capital with outstanding people and wrap it all in a
culture that is focused on optimizing risk-adjusted returns. It creates
a sustainable competitive advantage that can only be acquired
over many years with consistent discipline.

29 W. R. Berkley Corporation 2022
SEGMENT DATA

2022 Net Premiums Written by Major Line of Business (in percent)

I N S U R A N C E

$8.8B

Other Liability

Short-tail Lines

Workers’ Compensation

Commercial Automobile

Professional Liability

R E I N S U R A N C E &

M O N O L I N E E X C E S S

$1.2B

Casualty

Property

Monoline Excess

Assets and Net Reserves (dollars in billions)

I N S U R A N C E

Assets

Reserves

$11.2

R E I N S U R A N C E & M O N O L I N E E X C E S S

Assets

Reserves

$3.0

$27.0

$5.2

30 W. R. Berkley Corporation 2022 Annual Report 30INVESTMENTS

Over the past few years, we shortened the duration of our fixed income
portfolio to 2.4 years, while maintaining its high quality with an average rating of
AA-. As a result, there has been less volatility in our book value from mark-to-market
accounting and we are better able to manage the interest rate environment.

We manage our portfolio for total return, including capital gains. As investment
income is an important component of our economic model, we will continue
to seek out investment opportunities with above average risk-adjusted returns and
to position our fixed-maturity portfolio to manage the yield curve as well as the
impact of inflation.

Breakdown of Fixed-Maturity
Securities (including cash, in percent)

Corporate Bonds

Asset-backed Securities

State and Municipal Bonds

Mortgage-backed Securities

Cash and Cash Equivalents

Foreign Bonds

U.S. Government and Government Agency Bonds

Investment Data (dollars in millions)

Cash and Invested Assets

Invested Assets

Cash and Cash Equivalents

Total

Net Investment Income

Net Investment Gains

2021

$22,172

$1,569

$23,741

$672

$91

2022

$22,860

$1,449

$24,309

$779

$202

31 W. R. Berkley Corporation 2022 Financial Information

FORM

10-K

W. R . B e r k l e y C o r p o r a t i o n

32 W. R. Berkley Corporation IF YOU
DON’T LOOK,
YOU WON’T
SEE.

Evening Shadows, Maxfield Parrish

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 10-K(Mark One) ☒ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934For the transition period from ______ to ______.Commission file number 1-15202W. R. BERKLEY CORPORATION(Exact name of registrant as specified in its charter)Delaware 22-1867895(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)475 Steamboat RoadGreenwich,CT06830(Address of principal executive offices)(Zip Code)Registrant’s telephone number, including area code: (203) 629-3000Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registered Common Stock, par value $.20 per shareWRBNew York Stock Exchange5.700% Subordinated Debentures due 2058WRB-PENew York Stock Exchange5.100% Subordinated Debentures due 2059WRB-PFNew York Stock Exchange4.250% Subordinated Debentures due 2060WRB-PGNew York Stock Exchange4.125% Subordinated Debentures due 2061WRB-PHNew York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒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 duringthe 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 forthe past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐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 filer
Non-accelerated filer

☒
☐

Accelerated filer
Smaller reporting company
Emerging growth company

☐
☐
☐

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.

☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued
its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements
of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant’s executive officers during the relevant recovery period pursuant
to §240.10D-1(b). ☐

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

The aggregate market value of the registrant's common stock held by non-affiliates as of June 30, 2022, the last business day of the registrant’s most recently
completed second fiscal quarter, was $14,340,165,170.

Number of shares of common stock, $.20 par value, outstanding as of February 15, 2023: 263,446,321

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31,
2022, are incorporated herein by reference in Part III.

Page

113

115

116

117

121

SAFE HARBOR STATEMENT

PART I

ITEM
ITEM

ITEM

EX-4.1

EX-21

EX-23

EX-31.1

EX-31.2

EX-32.1

EX-101

1A.

1B.

BUSINESS

RISK FACTORS

UNRESOLVED STAFF COMMENTS

PROPERTIES

LEGAL PROCEEDINGS

MINE SAFETY DISCLOSURES

PART II

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES

RESERVED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

9A.

9B.

9C.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

CONTROLS AND PROCEDURES

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

PART III

10.

11.

12.

13.

14.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

EXECUTIVE COMPENSATION

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

PRINCIPAL ACCOUNTANT FEES AND SERVICES

PART IV

15.

16.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

FORM 10-K SUMMARY

DESCRIPTION OF REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

LIST OF COMPANIES AND SUBSIDIARIES

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) /15d-14(a)

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) /15d-14(a)

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002

INSTANCE DOCUMENT

SCHEMA DOCUMENT

CALCULATION LINKBASE DOCUMENT

LABELS LINKBASE DOCUMENT

PRESENTATION LINKBASE DOCUMENT

DEFINITION LINKBASE DOCUMENT

SAFE HARBOR STATEMENT
UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995

This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. This document may contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of
forward-looking words such as “believes,” “expects,” “potential,” “continued,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,”
“plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this
report including statements related to our outlook for the industry and for our performance for the year 2023 and beyond, are based upon our 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 that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and
uncertainties, including but not limited to:

•

the cyclical nature of the property casualty industry;

the impact of significant competition, including new entrants to the industry;

the long-tail and potentially volatile nature of the insurance and reinsurance business;

product demand and pricing;

claims development and the process of estimating reserves;

investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial
institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, including real estate, merger arbitrage, energy related
and private equity investments;

the effects of emerging claim and coverage issues;

the uncertain nature of damage theories and loss amounts, including claims for cyber security-related risks;

natural and man-made catastrophic losses, including as a result of terrorist activities;

the ongoing effects of the COVID-19 pandemic;

the impact of climate change, which may alter the frequency and increase the severity of catastrophe events;

general economic and market activities, including inflation, interest rates and volatility in the credit and capital markets;

the impact of conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other
initiatives taken in response to it, on our results and financial condition;

foreign currency and political risks relating to our international operations;

our ability to attract and retain key personnel and qualified employees;

continued availability of capital and financing;

the success of our new ventures or acquisitions and the availability of other opportunities;

the availability of reinsurance;

our retention under the Terrorism Risk Insurance Program Reauthorization Act of 2019 ("TRIPRA");

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 relating to our policyholders, independent agents and brokers;

changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies;

the availability of dividends from our insurance company subsidiaries;

cyber security breaches of our information technology systems and the information technology systems of our vendors and other third parties;

the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and

other risks detailed in this Form 10-K and from time to time in our other filings with the Securities and Exchange Commission (“SEC”).

We describe these risks and uncertainties in greater detail in Item 1A, Risk Factors. These risks and uncertainties could cause our actual results for the
year 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 elsewhere in this
Form 10-K and our other SEC filings. Forward-looking statements speak only as of the date on which they are made.

PART I

ITEM 1. BUSINESS

W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide
in two segments of the property casualty insurance business:

•

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

Reinsurance & Monoline Excess - Our Reinsurance businesses provide facultative and treaty reinsurance in the United States, as well as in the Asia
Pacific region, Australia, Continental Europe, South Africa and the United Kingdom. Monoline Excess businesses retain risk solely on an excess basis.

Our two reporting segments are each composed of individual businesses that serve a market defined by geography, products, services or industry served.
Each of our businesses is positioned close to its customer base and participates in a niche market requiring specialized knowledge. This strategy of
decentralized operations allows each of our businesses to identify and respond quickly and effectively to changing market conditions and specific customer
needs, while capitalizing on the benefits of centralized capital, investment and reinsurance management, and corporate actuarial, financial, enterprise risk
management and legal staff support.

Our business approach is focused on meeting the needs of our customers, maintaining a high quality balance sheet, and allocating capital to our best
opportunities. New businesses are started when opportunities are identified and when the right talent and expertise are found to lead a business. Of our 59
businesses, 52 have been organized and developed internally and seven have been added through acquisition.

Net premiums written, as reported based on United States generally accepted accounting principles (“GAAP”), for each of our reporting segments for each
of the past three years were as follows:

(In thousands)
Net premiums written:

Insurance
Reinsurance & Monoline Excess

Total

Percentage of net premiums written:

Insurance
Reinsurance & Monoline Excess

Total

2022

2021

2020

Year Ended December 31,

8,784,146
1,219,924
10,004,070

7,743,814
1,119,053
8,862,867

87.8 %
12.2

100.0 %

87.4 %
12.6

100.0 %

6,347,101
915,336
7,262,437

87.4 %
12.6

100.0 %

Thirty-two of our insurance company subsidiaries are rated by A.M. Best Company, Inc. ("A.M. Best") and have financial strength ratings of A+
(Superior) (the second highest rating out of 15 possible ratings). A.M. Best's ratings are based upon factors of concern to policyholders, insurance agents and
brokers and are not directed toward the protection of investors. A.M. Best states: “A Best's Financial Strength Rating (FSR) is an independent opinion of an
insurer's financial strength and ability to meet its ongoing insurance policy and contract obligations. An FSR is not assigned to specific insurance policies or
contracts and does not address any other risk.” A.M. Best reviews its ratings on a periodic basis, and its ratings of the Company's subsidiaries are therefore
subject to change.

Our twenty-three insurance company subsidiaries rated by Standard & Poor's (“S&P”) have financial strength ratings of A+ (the seventh highest rating

out of twenty-seven possible ratings).

Our Moody's financial strength ratings are A1 for Berkley Insurance Company, Berkley Regional Insurance Company and Admiral Insurance Company

(the fifth highest rating out of twenty-one possible ratings).

Our twenty-five insurance company subsidiaries rated by Fitch Ratings ("Fitch") have insurer financial strength ratings of AA- (the fourth highest rating

out of twenty-seven possible ratings).

The following sections describe our reporting segments and their businesses in greater detail. These businesses underwrite on behalf of one or more

affiliated insurance companies within the group. The businesses are identified for descriptive purposes only and are not legal entities, but for marketing
purposes may sometimes be referred to individually as "a Berkley company" or collectively as "Berkley companies." Unless otherwise indicated, all references
in this Form 10-K to “Berkley,” “we,” “us,” “our,” the “Company” or similar terms refer to W. R. Berkley Corporation together with its subsidiaries and
businesses. W. R. Berkley Corporation is a Delaware corporation formed in 1970.

Insurance

Our U.S.-based businesses predominantly underwrite commercial insurance business primarily throughout the United States, although many units offer

coverage globally, focusing on the following general areas:

Excess & Surplus Lines: A number of our businesses are dedicated to the U.S. excess and surplus lines market. They serve a diverse group of customers

that often have complex risk or unique exposures that typically fall outside the underwriting guidelines of the standard insurance market. Lines of business
underwritten by our excess and surplus lines businesses include premises operations, commercial automobile, property, products liability, general liability and
professional liability lines. Products are generally distributed through wholesale agents and brokers.

Industry Specialty: Certain other businesses focus on providing specialty coverages to customers within a particular industry that are best served by

underwriters and claims professionals with specialized knowledge of that industry. They offer multiple lines of business with policies tailored to address the
unique exposures of these industries, often with the flexibility of providing coverages on either an admitted or a non-admitted basis in the U.S., as well as
internationally. Each business delivers its products through one or more distribution channels, including retail and wholesale agents, brokers, and managing
general agents (MGAs), depending on the customer and the particular risks insured.

Product Specialty: Other businesses specialize in providing specific lines of insurance coverage, such as workers’ compensation or professional liability,

to a wide range of customers. They offer insurance products, analytical tools and risk management services such as loss control and claims management that
enable clients to manage their risk appropriately. Business is typically written on an admitted basis, although some businesses may offer non-admitted products
in the U.S. and offer products internationally. Independent agents and brokers are the primary means of distribution.

Regional: Certain businesses offer standard insurance products and services focused on meeting the specific needs of a geographically differentiated

customer base. Key clients are small-to-midsized businesses. These regionally focused businesses provide a broad array of commercial insurance products to
customers primarily in 45 states and the District of Columbia and have developed expertise in niches that reflect local economies. They are organized
geographically in order to provide them with the flexibility to adapt quickly to local market conditions and customer needs.

In addition, through our non-U.S. insurance businesses, we write business in more than 60 countries worldwide, with branches or offices in 43 cities

outside the United States, in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America and the United Kingdom. In each of our
operating territories, we have built decentralized structures that allow products and services to be tailored to each regional customer base. Our businesses are
managed by teams of professionals with expertise in local markets and knowledge of regional environments.

In addition to providing insurance products, certain businesses also provide a wide variety of fee-based services, including claims, administrative and

consulting services.

Businesses comprising the Insurance segment are as follows:

Acadia Insurance is a Northeast regional property casualty underwriter offering a broad portfolio of products exclusively through local independent

agents in Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. In addition to its general offerings, Acadia has
specialized expertise in insuring regional industries such as construction, service contractors, lumber, and transportation.

Admiral Insurance provides excess and surplus lines coverage for commercial risks that generally consist of hard-to- place, specialized risks that involve
moderate to high degrees of hazard. In both general liability and professional lines, Admiral has a broad line of products to meet the needs of existing as well as
emerging opportunities. The distribution of products is limited solely to wholesale brokers.

Berkley Accident and Health underwrites accident and health insurance and reinsurance products in four primary areas: medical stop loss, managed care,
special risk and group captive. It has a diversified product and service portfolio serving a range of clients from small employers, health care organizations, and
membership groups to Fortune 500 companies.

Berkley Agribusiness offers insurance for larger commercial risks across the United States involved in the supply, storage, handling, processing and

distribution of commodities related to the agriculture and food industries.

Berkley Alliance Managers offers tailored insurance coverages and comprehensive risk management solutions designed to enhance profitability and

reduce susceptibility to loss in four target markets - Design Professionals, Construction Professionals, Accounting Professionals and miscellaneous non-
medical Service Professionals.

Berkley Aspire provides excess and surplus lines coverage on a national basis to small to medium-sized insureds with low to moderate insurance risk. Its

product lines include general liability, liquor liability and some property and inland marine coverage. It serves a limited distribution channel, including select
Berkley business agents.

Berkley Asset Protection provides specialized insurance coverages for fine arts and jewelry exposures to commercial and individual clients.

Berkley Canada underwrites specialty, casualty and surety lines of business on behalf of the Canadian branch of Berkley Insurance Company. It
specializes in commercial casualty and professional liability, and offers a broad portfolio of risk products that include commercial general liability, umbrella,
professional liability, directors and officers, commercial property and surety, in addition to niche products for specific industries such as technology, life
sciences and travel.

Berkley Construction Solutions provides excess liability coverage to residential and commercial contractors on a project or practice basis.

Berkley Custom Insurance focuses on the excess casualty insurance market and offers umbrella and excess liability coverages to clients from the
small/middle market to Fortune 1000 companies in target classes of business including construction, manufacturing, retail/wholesale trade, finance, real estate,
public entities and oil & gas.

Berkley Cyber Risk Solutions focuses on insurance and risk management products that respond to the changing cyber security vulnerabilities of

organizations around the world. It offers specialty commercial cyber insurance coverages on a worldwide basis to clients of all sizes.

Berkley E&S Solutions provides general liability excess and surplus lines coverages for mid-market U.S. companies with generally hard-to-place,
specialized risks that involve moderate to high degrees of hazard and require tailored terms, utilizing self-insurance retentions. The distribution of products is
highly limited to a small number of individually appointed wholesale brokers.

Berkley Enterprise Risk Solutions provides custom workers' compensation programs to large, motivated employers operating in a broad range of

industries. Loss sensitive and/or guaranteed cost programs are offered to employers with exposure predominately in California.

Berkley Entertainment underwrites property casualty insurance products, both on an admitted and non-admitted basis, for clients in the entertainment

industry and sports-related organizations.

Berkley Environmental underwrites casualty and specialty environmental products for environmental customers including contractors, consultants,

property owners and facilities operators.

Berkley Financial Specialists serves the insurance needs of companies in the financial services sector and beyond. Its Berkley Crime division provides

crime and fidelity related insurance products for commercial organizations, financial sector businesses and governmental entities on a primary and excess basis.
Its Financial Services segment provides management liability and fidelity products to financial institutions, insurance companies and asset management firms.

Berkley Fire & Marine offers a broad range of preferred inland marine and related property risks and services to customers throughout the United States.

Products are distributed through independent agents and brokers.

Berkley Healthcare underwrites customized, comprehensive insurance solutions for the full spectrum of healthcare providers. Through Berkley

Healthcare Medical Professional, it offers a wide range of medical professional coverages. Through Berkley Healthcare Financial Lines, it offers a
comprehensive suite of financial lines coverages.

Berkley Human Services provides property casualty insurance coverages to human services organizations, including nonprofit and for-profit

organizations. Its product offerings include traditional primary and excess coverages.

Berkley Industrial Comp specializes in writing workers' compensation insurance for diverse high hazard industries in select states. Its products are

distributed by a select group of independent retail agents.

Berkley Insurance Asia underwrites specialty commercial insurance coverages to clients in North Asia and Southeast Asia through offices in Hong

Kong, Singapore, Labuan and Shanghai.

Berkley Insurance Australia underwrites general insurance business in Australia, including professional indemnity insurance for companies of all sizes.

Berkley Latinoamérica provides property, casualty, automobile, surety, group life and workers' compensation products and services in its operating

territories of Argentina, Brazil, the Caribbean, Colombia, Mexico and Uruguay.

Berkley Life Sciences offers a comprehensive spectrum of property casualty products to the life sciences industry on a global basis, including both

primary and excess product liability coverages. It serves pharmaceutical and biotech companies, medical device companies, dietary supplement companies,
medical and research related software developers, contract research and manufacturing organizations, research institutions and organizations, and other related
businesses.

Berkley Luxury Group provides commercial package insurance programs for high-end cooperative, condominium, and quality rental apartment buildings

and upscale restaurants in the New York, New Jersey, Chicago and Washington, D.C. metropolitan markets, as well as other select markets.

Berkley Management Protection offers a modular suite of management liability products for small and middle market companies through a bespoke and

easy to use platform tailored to independent agents. The management liability coverages they provide include directors and officers, employment practices,
fiduciary, cyber, crime and miscellaneous professional liability.

Berkley Mid-Atlantic Group provides commercial property casualty coverages to a wide variety of businesses in Delaware, the District of Columbia,

Maryland, Ohio, Pennsylvania, and Virginia. Focusing on small and middle market accounts, it complements its standard writings with specialized products in
areas such as construction.

Berkley Net Underwriters focuses on small and medium-sized commercial risks, using a web-based system to allow producers to quote, bind and service

workers' compensation insurance products on behalf of Berkley member insurance companies.

Berkley North Pacific offers preferred insurance products and services to a broad range of small to medium size commercial entities. It operates through

independent agents in Idaho, Montana, Oregon, Utah and Washington.

Berkley Offshore Underwriting Managers is a specialist global underwriter of energy and marine risks. Its three divisions provide specialty insurance

products in the energy upstream, energy liability and marine sectors.

Berkley Oil & Gas provides property casualty products and risk services to the United States energy sector. Its customer base includes risks of all sizes

that work in the oil patch, including operators, drillers, geophysical contractors, well-servicing contractors, and manufacturers/distributors of oil field products,
as well as those in the renewable energy sector.

Berkley One provides a customizable suite of personal lines insurance solutions including home, condo/co-op, auto, liability and collectibles. Berkley

One targets high net worth individuals and families with sophisticated risk management needs.

Berkley Product Protection offers a broad product suite, including Product Liability and Product Recall and Contamination, to assist clients in the

manufacturing, wholesale and import space with their risk management and insurance needs.

Berkley Professional Liability specializes in professional liability insurance for publicly-traded and private entities on a worldwide basis. Its liability

coverages include directors and officers, errors and omissions, fiduciary, employment practices, and sponsored insurance agents' errors and omissions. Berkley
Transactional, a division of Berkley Professional Liability, underwrites a full suite of transactional insurance products, including representations and warranties
insurance, and tax opinion insurance.

Berkley Program Specialists is a program management company offering both admitted and non-admitted insurance support on a nationwide basis for
commercial casualty and property program administrators with specialized insurance expertise. Its book is built around blocks of homogeneous business, or
programs, allowing for efficient processes, effective oversight of existing programs and sound implementation of new programs.

Berkley Public Entity specializes in providing excess coverage and services to individual governmental and scholastic entities and intergovernmental

risk sharing groups. Products include general liability, automobile liability, law enforcement liability, public officials and educator's legal liability, employment
practices liability, incidental medical, property and crime.

Berkley Risk provides at-risk and alternative risk insurance program management services for a broad range of groups and individuals including public

entity pools, professional associations, captives and self-insured clients. As a third party administrator, it manages workers’ compensation, liability and property
claims nationwide.

Berkley Select specializes in underwriting professional liability insurance for law firms and accounting firms, as well as other professional firms and

their practices. It also offers executive liability products, including directors and officers liability, employment practices and fiduciary liability, to small to
middle market privately held and not-for-profit customers. Berkley Select provides these insurance products on both an admitted and surplus lines basis.

Berkley Small Business Solutions offers commercial insurance products for small businesses through a modern technology platform that leverages data

and analytics. Its initial product offering focuses on preferred risks in the non-fleet transportation market.

Berkley Southeast offers a wide array of commercial lines products in six southeastern states: Alabama, Georgia, Mississippi, North Carolina, South

Carolina and Tennessee, specializing in small to mid-sized accounts.

Berkley Surety provides a full spectrum of surety bonds for construction, environmental and commercial surety accounts in the U.S. and Canada, through

an independent agency and broker platform across 20 field locations.

Berkley Technology Underwriters provides a broad range of first and third-party insurance programs for technology exposures and technology industries

on both a local and global basis.

Carolina Casualty is a national provider of primary commercial insurance products and services to the transportation industry. It underwrites on an

admitted basis in all 50 states and the District of Columbia. Its Berkley Prime Transportation business provides primary auto liability, auto physical damage
and general liability to a broad array of trucking operations.

Continental Western Group is a Midwest regional property and casualty insurance operation based in Des Moines, Iowa, providing underwriting and risk

management services to a broad array of regional businesses in thirteen Midwest states. In addition to its generalist portfolio, Continental Western offers
specialty underwriting solutions for diversified agriculture, construction, light manufacturing, transportation, volunteer fire departments, rural utilities and
public entities.

Gemini Transportation is a national provider of excess liability insurance for various domestic surface transportation businesses, including the railroad

industry as well as the trucking, busing and other industries that use rubber-wheeled vehicles for over-the-road use.

Intrepid Direct provides business insurance coverages through a direct distribution model focused on the franchise market, with specialties including the

restaurant, garage and fitness industries.

Key Risk specializes in writing workers' compensation insurance for diverse industries including healthcare, human services, transportation, temporary
staffing, professional employer organizations and contractors requiring coverage under the United States Longshore and Harbor Workers' Compensation Act
(USL&H). Its products are distributed by a select group of independent retail agents and wholesale brokers located throughout the United States.

Nautilus Insurance Group insures excess and surplus lines risks for small to medium-sized commercial risks with low to moderate susceptibility to loss.
It writes commercial excess and surplus lines business nationwide and admitted lines commercial business in a limited number of states. A substantial portion
of Nautilus' business is written through its close, long-standing network of general agents, who are chosen on a highly selective basis.

Preferred Employers Insurance focuses exclusively on workers' compensation products and services for businesses based in California. It serves

thousands of customers covering a broad spectrum of industries throughout the state.

Union Standard offers preferred commercial property and casualty insurance products and services to a wide range of small to medium size commercial

entities with a focus on the construction, farm/ranch, retail and service industries. It operates through independent agents in Arizona, Arkansas, New Mexico,
Oklahoma and Texas.

Vela Insurance Services specializes in commercial casualty insurance on an excess and surplus lines basis. Its primary focus is on general liability

insurance for construction, manufacturing and general casualty clients as well as products liability and miscellaneous professional liability coverages
distributed through wholesale insurance brokers.

Verus Specialty Insurance offers general liability, professional liability and property coverages for small to mid-sized commercial risks in the excess and

surplus lines insurance market through a select group of appointed wholesale brokers.

W R B Europe is comprised of specialist businesses offering a focused range of insurance products to markets in Continental Europe.

W / R / B Underwriting provides a broad range of insurance products to the Lloyd's marketplace, with a concentration in specialist classes of business

including property, professional indemnity and financial lines.

The following table sets forth the percentage of gross premiums written by each Insurance business:

Year Ended December 31,

Acadia Insurance
Admiral Insurance
Berkley Accident and Health
Berkley Agribusiness
Berkley Alliance Managers
Berkley Aspire
Berkley Asset Protection
Berkley Canada
Berkley Construction Solutions
Berkley Custom Insurance
Berkley Cyber Risk Solutions
Berkley E&S Solutions
Berkley Enterprise Risk Solutions
Berkley Entertainment
Berkley Environmental
Berkley Financial Specialists
Berkley Fire & Marine
Berkley Healthcare
Berkley Human Services
Berkley Industrial Comp
Berkley Insurance Asia
Berkley Insurance Australia
Berkley Latinoamérica
Berkley Life Sciences
Berkley Luxury Group
Berkley Management Protection
Berkley Mid-Atlantic Group
Berkley Net Underwriters
Berkley North Pacific
Berkley Offshore Underwriting Managers
Berkley Oil & Gas
Berkley One
Berkley Product Protection
Berkley Professional Liability
Berkley Program Specialists
Berkley Public Entity
Berkley Risk
Berkley Select
Berkley Small Business Solutions
Berkley Southeast
Berkley Surety
Berkley Technology Underwriters
Carolina Casualty
Continental Western Group
Gemini Transportation
Intrepid Direct
Key Risk
Nautilus Insurance Group
Preferred Employers Insurance
Union Standard
Vela Insurance Services
Verus Specialty Insurance
W R B Europe
W/R/B Underwriting
Other

Total

2021

5.5%
5.9
5.0
0.8
2.8
0.7
0.8
1.2
—
3.2
0.8
—
—
1.8
5.2
0.6
0.8
1.8
1.0
0.8
0.8
1.7
2.7
0.5
0.9
—
1.3
2.1
0.7
1.5
3.0
1.2
0.4
7.5
2.0
0.6
0.2
2.0
—
2.3
1.1
0.6
1.7
2.5
3.0
1.1
2.5
4.5
1.5
1.7
2.6
0.8
1.1
4.0
1.2
100.0%

2022

5.2%
6.2
5.1
0.8
2.7
0.9
1.0
1.2
0.4
3.1
0.9
—
—
1.8
5.6
0.6
0.7
1.8
1.1
0.7
0.8
1.7
2.9
0.5
0.8
0.1
1.0
2.2
0.7
1.4
3.5
1.8
0.3
5.8
1.7
0.6
0.3
1.8
—
2.2
1.1
0.6
2.1
2.4
3.1
1.2
2.2
4.7
1.2
1.5
2.5
0.8
1.0
3.6
2.1
100.0%

2020

6.0%
5.6
5.2
1.2
2.8
0.5
0.8
1.1
—
3.5
0.5
—
—
2.1
5.4
0.8
0.8
1.7
1.0
0.8
0.7
1.4
2.8
0.5
1.1
—
1.2
2.2
0.7
1.5
3.2
0.7
0.4
4.8
1.7
0.5
0.3
2.4
—
2.3
1.2
0.7
0.9
2.8
3.4
0.9
2.5
4.9
1.9
2.0
2.6
0.7
1.0
4.3
2.0
100.0%

The following table sets forth percentages of gross premiums written, by line, by our Insurance operations:

Other liability
Short-tail lines (1)
Professional liability
Workers' compensation
Commercial auto

Total

2022

37.0%
23.2
15.5
11.7
12.6

100.0%

Year Ended December 31,

2021

35.6%
22.2
17.3
12.4
12.5

100.0%

2020

36.0%
23.3
14.6
14.3
11.8

100.0%

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

lines.

Reinsurance & Monoline Excess

We provide other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on either a portfolio basis,

through treaty reinsurance, or on an individual basis, through facultative reinsurance. Our monoline excess operations solely retain risk on an excess basis.

Businesses comprising the Reinsurance & Monoline Excess segment are as follows:

Berkley Re America provides treaty and facultative reinsurance solutions on a variety of product lines through reinsurance brokers to companies whose

primary operations are within the United States and Canada.

Berkley Re Asia Pacific provides property and casualty reinsurance to the Asia Pacific marketplace. With offices in Brisbane, Sydney, Beijing, Labuan

and Singapore, each branch focuses on excess of loss reinsurance, targeting both property and casualty treaty and facultative contracts, through multiple
distribution channels.

Berkley Re Solutions is a direct casualty facultative reinsurance underwriter serving clients through a nationwide network of regional offices. Its
facultative reinsurance products include automatic, semi-automatic and individual risk assumed reinsurance. It also provides its customers with turnkey
products such as cyber, employment practices liability insurance ("EPLI"), liquor liability insurance and violent events coverage to help enhance their clients'
product offerings, along with underwriting, claims, and actuarial consultation.

Berkley Re UK writes international property casualty treaty and property facultative accounts. Its territorial scope includes reinsured clients domiciled in

the United Kingdom, Europe, Africa, the Middle East and the Caribbean.

Lloyd's Syndicate 2791 Participation represents the Company's minority participation in a Lloyd's syndicate that writes a broad range of mainly short-

tail classes of business.

Midwest Employers Casualty provides excess workers' compensation insurance products to individual employers, groups and workers' compensation

insurance companies across the United States. Its workers' compensation excess of loss products include self-insured excess of loss coverages and large
deductible policies. Through its relationship with Berkley Net Underwriters, Midwest Employers Casualty also offers multi-state coverage for group self-
insureds. It has developed sophisticated, proprietary analytical tools and risk management services designed to help its insureds lower their total cost of risk.

The following table sets forth the percentages of gross premiums written by each Reinsurance & Monoline Excess business:

Berkley Re America
Berkley Re Asia Pacific
Berkley Re Solutions
Berkley Re UK
Lloyd's Syndicate 2791 Participation
Midwest Employers Casualty

Total

2022

34.6%
15.6
12.5
12.8
6.1
18.4

Year Ended December 31,
2021

31.2%
15.4
13.8
13.8
6.8
19.0

2020

31.6%
13.5
14.4
14.7
6.0
19.8

100.0%

The following table sets forth the percentages of gross premiums written, by line, by our Reinsurance & Monoline Excess operations:

Casualty
Property
Monoline Excess
Total

Results by Segment

2022

61.7%
19.9
18.4

100.0%

Year Ended December 31,

2021

61.8%
19.2
19.0

100.0%

2020

58.1%
22.1
19.8

100.0%

Summary financial information about our segments is presented on a GAAP basis in the following table:

(In thousands)
Insurance
Revenue
Income before income taxes
Reinsurance & Monoline Excess
Revenue
Income before income taxes
Other (1)
Revenue
Loss before income taxes
Total
Revenue

Income before income taxes

2022

2021

2020

Year Ended December 31,

$
$

8,952,493
1,455,658

1,386,639
316,527

827,367
(52,504)

11,166,499
1,719,681

$
$

7,578,592
1,219,798

1,203,647
270,563

673,227
(207,456)

9,455,466
1,282,905

$
$

6,478,834
668,012

1,009,203
205,587

610,888
(168,797)

8,098,925
704,802

_______________________________________
(1) Represents corporate revenues and expenses, net investment gains and losses, and revenues and expenses from non-insurance businesses that are

consolidated for financial reporting purposes.

The table below represents summary underwriting ratios on a GAAP basis for our segments. Loss ratio is losses and loss expenses incurred expressed as
a percentage of net premiums earned. Expense ratio is underwriting expenses expressed as a percentage of net premiums earned. Underwriting expenses do not
include expenses related to insurance services or unallocated corporate expenses. Combined ratio is the sum of the loss ratio and the expense ratio. The
combined ratio represents a measure of underwriting profitability, excluding investment income. A number in excess of 100 indicates an underwriting loss; a
number below 100 indicates an underwriting profit:

Insurance
Loss ratio
Expense ratio

Combined ratio
Reinsurance & Monoline Excess
Loss ratio
Expense ratio

Combined ratio
Total
Loss ratio
Expense ratio

Combined ratio

Investments

2022

2021

2020

Year Ended December 31,

61.3 %
27.9

89.2 %

61.3 %
28.4
89.7 %

61.3 %
28.0

89.3 %

61.1 %
28.3

89.4 %

61.0 %
29.7
90.7 %

61.1 %
28.5

89.6 %

64.9 %
30.3

95.2 %

61.3 %
31.8
93.1 %

64.5 %
30.4

94.9 %

Investment results, before income taxes, were as follows:

(In thousands)

Average investments, at cost (1)

Net investment income (1)

Percent earned on average investments (1)

Net investment gains

Change in unrealized investment (losses) gains (2)

2022

Year Ended December 31,
2021

2020

24,438,112

779,185

3.2 %

202,397

(1,248,128)

22,234,975

671,618

3.0 %

90,632

(254,939)

20,012,182

583,821

2.9 %

103,000

164,645

_______________________________________
(1) Includes investments, cash and cash equivalents, trading accounts receivable (payable) from brokers and clearing organizations, trading account securities

sold but not yet purchased and unsettled purchases.

(2) Represents the change in unrealized investment (losses) gains for available for sale securities recognized in stockholders' equity.

For comparison, the following are the coupon returns for the Barclays U.S. Aggregate Bond Index and the dividend returns for the S&P 500 Index:

Barclays U.S. Aggregate Bond Index
S&P 500 Index

2022

2.7 %
1.3

Year Ended December 31,
2021

2.3 %
1.8

2020

2.8 %
1.8

The percentages of the fixed maturity portfolio categorized by contractual maturity, based on fair value, on the dates indicated, are set forth below.

Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay certain obligations.

1 year or less
Over 1 year through 5 years
Over 5 years through 10 years
Over 10 years
Mortgage-backed securities

Total

2022

8.7%
47.2
23.4
11.2
9.5
100.0%

Year Ended December 31,

2021

9.5%
46.1
25.2
12.7
6.5
100.0%

2020

11.4%
38.9
25.0
17.4
7.3
100.0%

At both December 31, 2022 and 2021, the fixed maturity portfolio, including cash and cash equivalents, had an effective duration of 2.4 years.

Loss and Loss Expense Reserves

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

others, 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 necessarily 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.

The risk and complexity of estimating loss reserves are greater when economic conditions are uncertain. It is especially difficult to estimate the impact

of inflation on loss reserves given the current economic environment and related government actions. Whereas a slowing economy would generally lead to
lower inflation or even deflation, increased government spending would generally lead to higher inflation. A change in our assumptions regarding inflation
would result in reserve increases or decreases that would be reflected in our earnings in periods in which such 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 the reserves are well tested over time, some of the major assumptions about anticipated
loss emergence patterns are subject to unanticipated fluctuation. 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. Although the loss reserves included in the Company’s financial statements
represent management’s best estimates, setting reserves is inherently uncertain and the Company cannot provide assurance that its current reserves will prove
adequate in light of subsequent events.

The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted

was $1,267 million and $1,387 million at December 31, 2022 and 2021, respectively. The aggregate net discount for those reserves, after reflecting the effects
of ceded reinsurance, was $416 million and $452 million at December 31, 2022 and 2021, respectively. At December 31, 2022, discount rates by year ranged
from 0.7% to 6.5%, with a weighted average discount rate of 3.4%.

Substantially all discounted workers’ compensation reserves (97% of total discounted reserves at December 31, 2022) are 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 December 31, 2022), 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.

To date, known environmental and asbestos claims have not had a material impact on the Company’s operations, because its subsidiaries generally did

not insure large industrial companies that are subject to significant environmental or asbestos exposures prior to 1986 when an absolute exclusion was
incorporated into standard policy language.

The Company’s net reserves for losses and loss expenses relating to environmental and asbestos claims on policies written before adoption of the
absolute exclusion was $20 million at both December 31, 2022 and 2021. The estimation of these liabilities is subject to significantly greater than normal
variation and uncertainty because it is difficult to make an actuarial estimate of these liabilities due to the absence of a generally accepted actuarial
methodology for these exposures and the potential effect of significant unresolved legal matters, including coverage issues, as well as the cost of litigating the
legal issues. Additionally, the determination of ultimate damages and the final allocation of such damages to financially responsible parties are highly
uncertain.

The table below provides a reconciliation of the beginning of year and end of year property casualty reserves for the indicated years:

(In thousands)
Net reserves at beginning of year

Cumulative effect adjustment resulting from changes in accounting principles (1)

Restated net reserves at beginning of period
Net provision for losses and loss expenses:

Claims occurring during the current year (2)
Increase in estimates for claims occurring in prior years (3)
Loss reserve discount amortization

Total

Net payments for claims:

Current year
Prior years

Total

Foreign currency translation
Net reserves at end of year
Ceded reserves at end of year

Gross reserves at end of year

Net change in premiums and losses occurring in prior years:

Increase in estimates for claims occurring in prior years (3)
Retrospective premium adjustments for claims occurring in prior years (4)

Net premium and reserve development on prior years

2022

2021

2020

12,848,362
—

12,848,362

11,620,393
—

11,620,393

5,774,713
54,511
32,526

5,861,750

1,068,577
3,279,333

4,347,910

(113,323)
14,248,879
2,762,344
17,011,223

(54,511)
18,106

(36,405)

4,921,191
863
31,906

4,953,960

887,896
2,777,798

3,665,694

(60,297)
12,848,362
2,542,526
15,390,888

(863)
7,510

6,647

10,697,998
5,927

10,703,925

4,432,937
627
35,142

4,468,706

921,054
2,677,595

3,598,649

46,411
11,620,393
2,164,037
13,784,430

(627)
16,807

16,180

____________________________________
(1) The cumulative effect adjustment resulting from changes in accounting principles relates to the allowance for expected credit losses on reinsurance

recoverables that commenced on January 1, 2020 due to the adoption of ASU 2016-13.

(2) Claims occurring during the current year are net of loss reserve discounts of $35 million, $21 million and $10 million in 2022, 2021 and 2020,

respectively.

(3) The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in

prior years increased by $16 million in 2022, and decreased by $19 million in 2021 and $21 million in 2020, respectively.

(4) For certain retrospectively rated insurance policies and reinsurance agreements, changes in loss and loss expenses for prior years are offset by additional or

return premiums.

Also, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and note 14, Reserves for Losses and Loss

Expenses included in our audited consolidated financial statements for further information regarding the changes in estimates for claims occurring in prior
years.

A reconciliation between the reserves as of December 31, 2022 as reported in the accompanying consolidated GAAP financial statements and those

reported on the basis of statutory accounting principles (“SAP”) in the Company’s U.S. regulatory filings is as follows:

(In thousands)
Net reserves reported in U.S. regulatory filings on a SAP basis
Reserves for non-U.S. companies
Loss reserve discounting (1)
Ceded reserves
Allowance for expected credit losses on due from reinsurers

Gross reserves reported in the consolidated GAAP financial statements

13,640,489
679,246
(78,336)
2,762,344
7,480

17,011,223

_________________________
(1) For statutory purposes, the Company discounts its workers’ compensation reinsurance reserves at 2.5% as prescribed or permitted by the Department of
Insurance of the State of Delaware. In its GAAP financial statements, the Company discounts excess workers’ compensation reserves at the risk-free rate
and assumed workers’ compensation reserves at the statutory rate.

Reinsurance

We follow a common industry practice of reinsuring a portion of our exposures and paying to reinsurers a portion of the premiums received on the
policies that we write. Reinsurance is purchased principally to reduce net liability on individual risks and to protect against catastrophic losses. Although
reinsurance does not legally discharge an insurer from its primary liability for the full amount of the policies, it does make the assuming reinsurer contractually
liable to the insurer to the extent of the reinsurance coverage. We monitor the financial condition of our reinsurers and attempt to place our coverages only with
substantial, financially sound carriers. As a result, generally the reinsurers who reinsure our casualty insurance must have an A.M. Best rating of “A
(Excellent)” or better with at least $1 billion in policyholder surplus and the reinsurers who cover our property insurance must have an A.M. Best rating of “A-
(Excellent)” or better with at least $1 billion in policyholder surplus.

Regulation

U.S. Regulation

Our U.S. insurance subsidiaries are principally regulated by their domiciliary state insurance departments and are subject to varying degrees of
regulation and supervision in the other U.S. jurisdictions in which they do business. As of January 1, 2023, there are six domiciliary states related to our U.S.
insurance subsidiaries.

Overview. Our domestic insurance subsidiaries are subject to statutes which delegate regulatory, supervisory and administrative powers to state

insurance commissioners. This regulation relates to such matters as the standards of solvency which must be met and maintained; the licensing of insurers and
their agents; the nature of and limitations on investments; deposits of securities for the benefit of policyholders; approval of certain policy forms and premium
rates; periodic examination of the affairs of insurance companies; annual and other reports required to be filed on the financial condition of insurers or for other
purposes; establishment and maintenance of reserves for unearned premiums, loss expenses and losses; and requirements regarding numerous other matters.
Our property casualty subsidiaries, other than our excess and surplus lines and reinsurance subsidiaries, must generally file all rates with the insurance
department of each state in which they operate. Our excess and

surplus lines and reinsurance subsidiaries generally operate free of rate and form regulation.

Legislative and Regulatory Activity Related to the COVID-19 Pandemic. In response to the outbreak of the COVID-19 pandemic in 2020, legislators in

several states and in the United States Congress introduced proposals that would have mandated insurance coverage for certain pandemic-related losses,
including business interruption losses, under previously-issued policies that were not designed or priced to provide such coverage. Federal lawmakers also
discussed the possibility of a public-private partnership, and there appears to have been a broadly held and bipartisan consensus that pandemic risk is generally
uninsurable absent some kind of publicly-funded backstop. While these state and federal proposals have not meaningfully progressed, there remains a risk that
they might be revived, or that future variants of COVID-19 or concerns about the possibility of a future pandemic might prompt similar legislative and
regulatory proposals. See “Risk Factors — Risks Related to Our Industry — The COVID-19 pandemic has materially and adversely affected our results of
operations, and is expected to continue and therefore may materially and adversely affect our results of operations, financial position and liquidity.”

Holding Company Statutes. In addition to regulatory supervision of our insurance subsidiaries, we are subject to state statutes governing insurance
holding company systems. Under the terms of applicable state statutes, any person or entity desiring to purchase more than a specified percentage (commonly
10%) of our outstanding voting securities would be required to obtain prior regulatory approval of the purchase. Typically, such statutes require that we
periodically file information with the appropriate domiciliary state insurance commissioner, including information concerning our capital structure, ownership,
financial condition and general business operations.

We must also annually submit to the lead state regulator for our group an “enterprise risk management report” which identifies the activities and
circumstances of any affiliated company that might have a material adverse effect on the financial condition of our group or our U.S. licensed insurers.

In addition, all states have adopted changes to the holding company act that authorize U.S. insurance regulators to lead or participate in the group-wide

supervision of certain international insurance groups. In November 2019, the International Association of Insurance Supervisors (“IAIS”), an international
standard setter, adopted a global framework for the supervision of internationally active insurance groups, as discussed below under “International Regulation.”
This framework includes a risk-based, group-wide global insurance capital standard (“ICS”), which is undergoing a five-year monitoring period that started in
January 2020.

In the United States, the National Association of Insurance Commissioners (the “NAIC”) has developed a group capital calculation tool that uses a risk-

based capital aggregation methodology for all entities in an insurance holding company system. The goal is to provide U.S. regulators with a method to
aggregate the available capital and the minimum capital of each entity in a group in a way that applies to all companies regardless of their structure. In 2020,
the NAIC adopted amendments to the model holding company act and regulation that implement the group capital calculation by requiring the ultimate
controlling person of an insurer subject to holding company registration to file the group capital calculation with its lead state regulator. The annual filing
requirement will become effective once the states have adopted the NAIC holding company amendments. This annual filing requirement became effective in
Delaware, our lead state insurance regulator, on February 7, 2022.

All states have adopted the NAIC's Risk Management and Own Risk and Solvency Assessment Model Act (the “ORSA Model Act”), which requires an
insurance holding company system’s chief risk officer to submit annually to its lead state insurance regulator an Own Risk and Solvency Assessment Summary
Report (“ORSA Report”). The ORSA Report is a confidential internal assessment of the material and relevant risks associated with an insurer’s current
business plan and the sufficiency of capital resources to support those risks. Under the ORSA Model Act, as enacted by the states, we are required to:

•

regularly, no less than annually, conduct an ORSA to assess the adequacy of our risk management framework, and current and estimated projected
future solvency position;

internally document the process and results of the assessment; and

provide an ORSA Report annually to the State of Delaware's Insurance Commissioner.

Cybersecurity Regulations. New York’s cybersecurity regulation applies to financial services institutions authorized by the New York State Department

of Financial Services (the “NYDFS”), including our insurance subsidiaries licensed in New York. The regulation requires these entities to assess risks
associated with their information systems and establish and maintain a cybersecurity program reasonably designed to protect consumers’ private data and the
confidentiality, integrity and availability of the licensee’s information systems. In November 2022, the NYDFS proposed amendments to New York’s
cybersecurity regulation, which, if adopted, would require additional reporting, governance and oversight measures to be implemented.

The NAIC has adopted the Insurance Data Security Model Law (the “Cybersecurity Model Law”) for consideration by state legislatures, which, when

adopted by the states, establishes standards for data security, the investigation of cybersecurity events involving unauthorized access to, or the misuse of,
certain nonpublic information, and reporting to insurance commissioners. The Cybersecurity Model Law imposes significant regulatory burdens intended to
protect the confidentiality, integrity and availability of information systems. As of December 31, 2022, the Cybersecurity Model Law, or a form thereof, had
been adopted by several states, including three of our U.S. insurance subsidiaries’ domiciliary states. A drafting note in the Cybersecurity Model Law states that
a licensee’s compliance with New York's cybersecurity regulation is intended to constitute compliance with the Cybersecurity Model Law, but compliance
remains a state-by-state issue and we would need to consider any differences in implementation and enforcement of the Cybersecurity Model Law as part of
our compliance efforts. Additionally, the Federal Trade Commission amended the “Standards for Safeguarding Customer Information Rules (otherwise known
as the “Safeguards Rule”) in 2021 to require covered financial institutions to implement certain data security measures and practices in their information
security programs. Many of the requirements of the amended Safeguards Rule are similar to New York's cybersecurity regulation and the Cybersecurity Model
Law, but there are some differences that may impose increased operational burdens and compliance costs. The amended Safeguards Rule will become effective
in June 2023.

Certain other states are also developing or have developed regulations related to privacy and data security. For example, the California Consumer
Privacy Act (“CCPA”), which became effective in January 2020, broadly regulates the collection, processing and disclosure of California residents’ personal
information, imposes limits on the “sale” of personal information and grants California residents certain rights to, among other things, access and delete data
about them in certain circumstances. The CCPA also established a private right of action, with potentially significant statutory damages, whereby businesses
that fail to implement reasonable security measures to protect against breaches of personal information could be liable to affected consumers. California
subsequently enacted the California Privacy Rights Act (“CPRA”), which came into full effect in January 2023. The CPRA amends the CCPA by imposing
additional limitations and obligations with respect to covered businesses’ use and sharing of certain personal data. Compliance with the CCPA/CPRA may
increase the cost of providing our products and services in California. Other states have considered – and some states have adopted - similar proposals. For
instance, Virginia enacted a data privacy law in 2021 that became effective in January 2023. Additionally, Colorado, Connecticut and Utah have enacted data
privacy laws that will come into effect later in 2023. These laws establish in those states many of the same data privacy and security requirements as other
existing laws, such as the CCPA.

We cannot predict the impact, if any, that any current, proposed or future federal or state cybersecurity laws or regulations will have on our business,

financial condition or results of operations.

Risk-Based Capital Requirements. The NAIC utilizes a Risk-Based Capital (“RBC”) formula that is designed to measure the adequacy of an insurer's
statutory surplus in relation to the risks inherent in its business. The RBC formula develops a risk adjusted target level of adjusted statutory capital by applying
certain factors to various asset, premium and reserve items. The NAIC RBC Model Law provides for four incremental levels of regulatory attention for insurers
whose surplus is below the calculated RBC target. These levels of attention range in severity from requiring the insurer to submit a plan for corrective action to
actually placing the insurer under regulatory control. The RBC of each of our domestic insurance subsidiaries was above the calculated RBC target level as of
December 31, 2022.

Insurance Regulatory Information System. The NAIC also has developed a set of 13 financial ratios for property and casualty insurers referred to as
the Insurance Regulatory Information System (“IRIS”). On the basis of statutory financial statements filed with state insurance regulators, the NAIC annually
calculates these IRIS ratios to assist state insurance regulators in monitoring the financial condition of insurance companies. The NAIC has established an
acceptable range for each of the IRIS financial ratios.

Guaranty Funds. Our U.S. insurance subsidiaries are also subject to assessment by state guaranty funds in states where we transact admitted business

when an insurer in a particular jurisdiction has been judicially declared insolvent and the insolvent company's available funds are insufficient to pay
policyholders and claimants the amounts to which they are entitled. The protection afforded under a state's guaranty fund to policyholders of the insolvent
insurer varies from state to state. Generally, all licensed property casualty insurers are considered to be members of the fund, and assessments are based upon
their pro rata share of direct written premiums in that state. The NAIC Post-Assessment Property and Liability Insurance Guaranty Association Model Act, a
version of which has been adopted by all states, limits assessments to 2% of an insurer’s subject premiums and permits recoupment of assessments through rate
setting. Likewise, several states (or underwriting organizations of which our insurance subsidiaries are required to be members) have limited assessment
authority with regard to deficits in certain lines of business.

Additionally, state insurance laws and regulations require us to participate in mandatory property-liability “shared market,” “pooling” or similar

arrangements that provide certain types of insurance coverage to individuals or others who otherwise are unable to purchase coverage voluntarily provided by
private insurers. Shared market mechanisms include assigned risk plans and fair access to insurance requirement or “FAIR” plans. In addition, some states
require insurers to

participate in reinsurance pools for claims that exceed specified amounts. Our participation in these mandatory shared market or pooling mechanisms generally
is related to the amount of our direct writings for the type of coverage written by the specific mechanism in the applicable state.

Dividends. We receive funds from our insurance company subsidiaries in the form of dividends and management fees for certain management
services. Annual dividends in excess of maximum amounts prescribed by state statutes may not be paid without the approval of the insurance commissioner of
the state in which an insurance subsidiary is domiciled. See “Management's Discussion and Analysis of Financial Condition and Results of Operations-
Liquidity and Capital Resources.”

Trade Practices. State insurance laws and regulations include numerous provisions governing trade practices and the marketplace activities of

insurers, including provisions governing marketing and sales practices, policyholder services, claims management and complaint handling. State regulatory
authorities generally enforce these provisions through periodic market conduct examinations.

Investment Regulation. Investments by our domestic insurance companies must comply with applicable laws and regulations which prescribe the kind,
quality and concentration of investments. In general, these laws and regulations permit investments in federal, state and municipal obligations, corporate bonds,
preferred and common equity securities, mortgage loans, real estate and certain other investments, subject to specified limits and certain other qualifications.
Investments that do not comply with these limits and qualifications are deducted in our insurance subsidiaries' calculation of their statutory capital and surplus.

Terrorism Risk Insurance. The Terrorism Risk Insurance Act of 2002 established a Federal program that provides for a system of shared public and

private compensation for insured losses resulting from acts of terrorism. Pursuant to the Terrorism Risk Insurance Program Reauthorization Act of 2019
(“TRIPRA”), the program was extended until December 31, 2027.

TRIPRA provides a federal backstop to all U.S. based property and casualty insurers for insurance related losses resulting from any act of terrorism on

U.S. soil or against certain U.S. air carriers, vessels or foreign missions. TRIPRA is applicable to almost all commercial lines of property and casualty
insurance but excludes commercial auto, burglary and theft, surety, professional liability and farm owners' multi-peril insurance. Insurers with direct
commercial property and casualty insurance exposure in the United States are required to participate in the program and make available coverage for certified
acts of terrorism. TRIPRA's definition of certified acts includes domestic terrorism. Federal participation will be triggered under TRIPRA when the Secretary
of Treasury certifies an act of terrorism.

Under the program, the federal government will pay 80% of an insurer's covered losses in excess of the insurer's applicable deductible. The insurer's

deductible is calculated as 20% of earned premium for the prior year for covered lines of commercial property and casualty insurance. Based on our 2022
earned premiums, our aggregate deductible under TRIPRA during 2023 will be approximately $1,310 million. The federal program will not pay losses for
certified acts unless such losses exceed $200 million industry-wide for any calendar year after 2020. TRIPRA limits the federal government's share of losses at
$100 billion for a program year. In addition, an insurer that has satisfied its deductible is not liable for the payment of losses in excess of the $100 billion cap.

Excess and Surplus Lines. The regulation of our U.S. subsidiaries' excess and surplus lines insurance business differs significantly from the regulation of
our admitted business. Our surplus lines subsidiaries are subject to the surplus lines regulation and reporting requirements of the jurisdictions in which they are
eligible to write surplus lines insurance. Although surplus lines business is generally less regulated than admitted business, principally with respect to rates and
policy forms, strict regulations apply to surplus lines placements in the laws of every state and the regulation of surplus lines insurance may undergo changes in
the future. Federal or state measures may be introduced to increase the oversight of surplus lines insurance in the future.

Climate Change and Financial Risks. The NAIC and state insurance regulators are evaluating issues related to the topic of climate risk. The NAIC’s goal

is to address climate-related risks through three areas of insurance regulation: financial risk analysis; insurance market availability and affordability; and
consumer education and outreach. In New York, the NYDFS issued a circular letter in September 2020 that applies to both New York domestic and foreign
authorized insurers, such as our insurance subsidiaries licensed in New York. The circular letter states that the NYDFS expects these insurers to integrate
financial risks related to climate change into their governance frameworks, risk management processes, business strategies and scenario analysis, and develop
their approach to climate-related financial disclosure. For example, an insurer should designate a board member or board committee, as well as a senior
management function, to oversee the management of financial risks associated with climate change. The NYDFS also adopted an amendment to the regulation
governing enterprise risk management, which applies to our insurance subsidiaries licensed in New York, that requires an insurance group's enterprise risk
management function to address certain additional risks, including climate change risk.

In addition, the Federal Insurance Office (the “FIO”) is authorized to monitor the U.S. insurance industry under the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 (the “Dodd-Frank Act”), as discussed below under “Federal Regulation.” The FIO is assessing how the insurance sector may
help mitigate climate-related risks and achieve national climate-related goals.

Diversity and Corporate Governance.The NAIC and state insurance regulators are evaluating issues related to diversity within the insurance industry,
such as the diversity of an insurer’s board of directors and management. The NAIC is also examining practices in the insurance industry in order to determine
how barriers are created that disadvantage or discriminate against people of color or historically underrepresented groups. On March 16, 2021, the NYDFS
issued a circular letter stating that it expects the insurers it regulates, such as our insurance subsidiaries licensed in New York, to make diversity of their
leadership a business priority and a key element of their corporate governance. See “Human Capital Resources” below.

Federal Regulation. The federal government and its regulatory agencies generally do not directly regulate the business of insurance, although federal
initiatives could have an impact on our business in a variety of ways. The Dodd-Frank Act effected sweeping changes to financial services regulation in the
United States, and created two new federal government bodies, the FIO and the Financial Stability Oversight Council (the “FSOC”). The FIO does not have
general supervisory or regulatory authority over the business of insurance, although it has preemption authority over state insurance laws that conflict with
certain international agreements, as discussed below. The FIO also has authority to represent the United States in international insurance matters and is
authorized to monitor the U.S. insurance industry and identify potential regulatory gaps that could contribute to systemic risk. The Economic Growth,
Regulatory Relief and Consumer Protection Act addresses the roles played by federal regulators at international insurance standard-setting forums, and it
directs the Director of the FIO and the Board of Governors of the Federal Reserve to support increased transparency at international standard-setting regulatory
forums (e.g., the IAIS). These federal regulations also instruct the FIO and the Federal Reserve to achieve consensus positions with the states through the
NAIC prior to taking a position on any insurance proposal by a global insurance regulatory forum.

The Dodd-Frank Act authorizes the Secretary of the Treasury and U.S. Trade Representative to enter into international agreements of mutual

recognition regarding the prudential regulation of insurance or reinsurance. The U.S. and the European Union ("EU") signed such a covered agreement (the
"EU Covered Agreement") in September 2017. The EU Covered Agreement addresses three areas of prudential supervision: reinsurance, group supervision and
the exchange of information between the U.S. and EU. Under the EU Covered Agreement, reinsurance collateral requirements no longer apply to qualifying
EU reinsurers that sell reinsurance to the U.S. market, and U.S. reinsurers operating in the EU market are no longer subject to “local presence” requirements.
The EU Covered Agreement establishes group supervision practices that apply only to U.S. and EU insurance groups operating in both territories. For instance,
the EU Covered Agreement states that, provided the U.S. has adopted group supervision including worldwide group governance, solvency, capital and
reporting, U.S.-headquartered insurance groups with operations in the EU will be supervised at the worldwide level only by U.S. insurance regulators, thereby
precluding EU insurance supervisors from exercising solvency and capital requirements over the worldwide operations of those insurers.

In December 2018, the U.S. Department of the Treasury and the Office of the U.S. Trade Representative entered into a covered agreement with the
U.K. (the “U.K. Covered Agreement,” and together with the EU Covered Agreement, the “Covered Agreements”) in anticipation of the U.K.’s exit from the
EU. The U.K. Covered Agreement largely reflects the provisions of the EU Covered Agreement and incorporates the same timeframes within it.

Under the Dodd-Frank Act, the FIO has preemption authority over state insurance laws that conflict with the Covered Agreements as of September 1,

2022, such as state credit for reinsurance laws that result in non-U.S. reinsurers subject to the Covered Agreements being treated less favorably than U.S.
reinsurers. The NAIC previously adopted amendments to its Credit for Reinsurance Model Law to satisfy the substantive and timing requirements of the
Covered Agreements, which amendments have been enacted by all states. On September 30, 2022, the FIO reported that it did not recommend taking any
preemption action as a result of inconsistency between the Covered Agreements and state credit for reinsurance laws, although it is still monitoring state
measures implementing the NAIC’s revisions to the Credit for Reinsurance Model Law. The FIO plans to publish an update to its preemption report during
2023. The amended Credit for Reinsurance Model Law also extends the zero reinsurance collateral provisions in the Covered Agreements to qualified
reinsurers domiciled in U.S. jurisdictions that are accredited by the NAIC and to non-U.S. jurisdictions that have not entered into a covered agreement with the
U.S. but which the NAIC has identified as “reciprocal jurisdictions” pursuant to the NAIC Qualified Jurisdiction Process.

We cannot currently predict the impact of these changes to the law or whether any other covered agreements will be successfully adopted, and cannot

currently estimate the impact of these changes to the law and any such adopted covered agreements on our business, financial condition or operating results.

The FIO also can recommend that the FSOC designate an insurer as an entity posing risks to the United States’ financial stability in the event of the

insurer’s material financial distress or failure, i.e., a “systemically important financial institution” or a “non-bank SIFI.” An insurer so designated by the FSOC
will be subject to Federal Reserve supervision and

heightened prudential standards. There are currently no such non-bank SIFIs designated by the FSOC. The FSOC changed its process for designating non-bank
SIFIs, effective in January 2020, by adopting an activities-based approach and moving away from the entities-based approach.

Based upon our current business model and balance sheet, we do not believe that we will be designated by the FSOC as such an institution. Although
the potential impact of any future amendments to the Dodd-Frank Act on the U.S. insurance industry is not clear, our business could be affected by changes to
the U.S. system of insurance regulation or our designation or the designation of insurers or reinsurers with which we do business as systemically important
non-bank financial companies.

International Regulation

Our insurance subsidiaries based in the United Kingdom are regulated by the Prudential Regulation Authority (“PRA”) and/or the Financial Conduct
Authority (“FCA”). The PRA’s primary objectives with regard to insurers are to promote the safety and soundness of insurers and to contribute to the securing
of an appropriate degree of protection for current and future policyholders. The FCA has three operational objectives: (i) to secure an appropriate degree of
protection for consumers, (ii) to protect and enhance the integrity of the United Kingdom’s financial system, and (iii) to promote effective competition in the
interests of consumers in the financial services markets. The PRA and FCA employ a variety of regulatory tools to achieve their objectives, including periodic
auditing and reporting requirements, risk assessment reviews, minimum solvency margins and individual capital assessment requirements, dividend
restrictions, in certain cases, approval requirements governing the appointment of key officers, approval requirements governing controlling ownership
interests and various other requirements.

Our Lloyd’s managing agency is also regulated by Lloyd’s, and the Lloyd’s syndicate business is subject to Lloyd’s supervision. Through Lloyd’s, we

are licensed to write business in various countries throughout the world by virtue of Lloyd’s international licenses. In each such country, we are subject to the
laws and insurance regulation of that country. Our insurance subsidiary based in Liechtenstein is regulated by the Financial Market Authority of Liechtenstein
("FMA"), which has regulatory tools analogous to those of the U.K. regulators noted above.

Additionally, U.K. and Liechtenstein laws and regulations also impact us as “controllers” of our European-regulated subsidiaries, whereby we are
required to notify the appropriate authorities about significant events relating to such regulated subsidiaries’ controllers (i.e. persons or entities which have
certain levels of direct or indirect voting power or economic interests in the regulated entities) as well as changes of control, and to submit annual reports
regarding their controllers. The PRA/FCA’s Senior Managers and Certification Regime and analogous regulation in Liechtenstein further provide regulatory
frameworks for standards of fitness and propriety, conduct and accountability for individuals in positions of responsibility at insurers. In addition, certain
employees are individually registered at Lloyd’s.

Our insurance business throughout the EU and EEA is subject to “Solvency II,” an insurance regulatory regime governing, among other things, capital

adequacy and risk management. Following the U.K.’s withdrawal from the EU, or Brexit, our Lloyd’s managing agency (and the U.K. branch of our
Liechtenstein subsidiary) are now subject to a separate U.K. prudential regime, which is broadly identical to Solvency II from January 1, 2021. However, the
two regimes are likely to diverge in the near future. The U.K. has undertaken a review of Solvency II and of the regulatory regime applicable to U.K.
authorized insurers and reinsurers.

Following this review, on November 17, 2022, the U.K.’s HM Treasury published a finalized package of proposed reforms to the U.K.’s prudential
regime, which covers a range of areas including the risk margin, matching adjustment requirements and regulatory reporting obligations. These reforms will be
reflected in new U.K. legislation and regulation.

Similarly, the European Commission has undertaken its own review of Solvency II and, on September 22, 2021, published a package of proposed

legislative reforms for amending the existing regulatory framework. The European Council published its agreed position on the European Commission’s
proposed reforms in June 2022, which it is currently negotiating with the European Parliament, although the full extent of the changes will only be known once
the package of legislative reforms is finalized.

Solvency II provides for the supervision of group solvency. Under Solvency II, it is possible that the U.S. parent of a European Union subsidiary could
be subject to certain Solvency II requirements if the U.S. company is not already subject to regulations deemed “equivalent” to Solvency II. Currently, the U.S.
system of insurance regulation relating to group supervision is not deemed “equivalent” to Solvency II by European Union authorities. The PRA will also
perform separate, but comparable, supervision of group solvency under the U.K.’s own domestic prudential regime where a U.S. holding company is a parent
of a subsidiary U.K. insurer or reinsurer.

The Liechtenstein financial services regulator, the FMA, is the group supervisor for our European-regulated subsidiaries. However, the Covered

Agreements prohibit any EU supervisor or the PRA (as applicable) from exercising group-wide supervision at any level above the highest company organized
in the country of that supervisor.

We must also comply with the EU General Data Protection Regulation (EU) 2016/879) (“GDPR”), which took effect

in May 2018. The regulation’s goal is to impose increased individual rights and protections for all personal data located in or originating from the EU. The Data
Protection Act 2018 and the U.K. General Data Protection Regulation, which is the retained EU law version of the GDPR by virtue of the European Union
(Withdrawal) Act 2018 and as amended by the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019
(together, “U.K. GDPR”), regulate data protection for all individuals within the U.K. Both the GDPR and the U.K. GDPR are extraterritorial in that they apply
to all businesses in the EU and the U.K. respectively and any business outside the EU and the U.K. that process EU and/or U.K. personal data of individuals in
the EU and/or the U.K. Moreover, there are significant fines associated with non-compliance. In particular, we need to monitor our compliance with all relevant
member states’ laws and regulations, including where permitted derogations from the GDPR and the U.K. GDPR are introduced. The introduction of the GDPR
and the U.K. GDPR, and any resultant changes in EU member states’ or U.K. national laws and regulations, has increased our compliance obligations and has
necessitated the review and implementation of policies and processes relating to our collection and use of data, and has required us to change our business
practices regarding these matters.

In addition, we may become subject to or affected by regulatory policies adopted by the IAIS, an international standard setter consisting of supervisors
and regulators from more than 200 jurisdictions. The IAIS has been working on several initiatives to consider changes to insurer solvency standards and group
supervision of companies in a holding company system in response to the increasing globalization of the insurance sector. In November 2019, the IAIS
formally adopted a global framework for the supervision of internationally active insurance groups (“IAIGs”), which is referred to as the Common Framework
for the Supervision of Internationally Active Insurance Groups, or “ComFrame.” ComFrame is intended to provide a framework of basic standards for IAIGs
and a process for supervisors to cooperate in the supervision of IAIGs. Also in November 2019, the IAIS adopted a risk-based group-wide global insurance
capital standard (“ICS”) that will apply to IAIGs and ultimately form a part of ComFrame. The ICS commenced a five-year monitoring period in January 2020
which is being used for confidential reporting and discussion in supervisory colleges to provide feedback to the IAIS on the ICS’s design and performance, but
will not trigger any supervisory action. Following this monitoring period, the ICS is expected to be implemented in 2025 as a group-wide prescribed capital
requirement for IAIGs and integrated into the rest of ComFrame. As noted above under “U.S. Regulation,” it is unclear how the development of the ICS will
interact with existing capital requirements for insurance companies in the United States and the NAIC’s development of the group capital calculation.

Our international operations are also subject to varying degrees of regulation in Mexico, Australia and Canada and in certain other countries in Europe,

South America, and Southeast Asia. Generally, our subsidiaries must satisfy local regulatory requirements. While each country imposes licensing, solvency,
auditing and financial reporting requirements, the type and extent of the requirements differ substantially. Key areas where country regulations may differ
include: (i) the type of financial reports to be filed; (ii) a requirement to use local intermediaries; (iii) the amount of reinsurance permissible; (iv) the scope of
any regulation of policy forms and rates; and (v) the type and frequency of regulatory examinations.

Competition

The property casualty insurance and reinsurance businesses are highly competitive, with many insurance companies of various sizes, as well as other

entities offering risk alternatives such as self-insured retentions or captive programs, transacting business in the United States and internationally. We compete
directly with a large number of these companies. Competition in our industry is largely measured by the ability to provide insurance and services at a price and
on terms that are reasonable and acceptable to the customer. Our strategy in this highly fragmented industry is to seek specialized areas or geographic regions
where our businesses can gain a competitive advantage by responding quickly to changing market conditions. Our businesses establish their own pricing
practices based upon a Company-wide philosophy to price products with the intent of making an underwriting profit.

Competition for insurance business within the United States comes from other specialty insurers, regional carriers, large national multi-line companies
and reinsurers. Our specialty businesses compete with excess and surplus insurers as well as standard carriers. Our regional businesses compete with mutual
and other regional stock companies as well as national carriers. Additionally, direct writers of property casualty insurance compete with our regional businesses
by writing insurance through their salaried employees, generally at a lower acquisition cost than through independent agents such as those used by the
Company. We compete internationally with native insurance operations both large and small, which in some cases are related to government entities, as well as
with branches or local subsidiaries of multinational companies.

Competition for reinsurance business, which is especially strong, comes from domestic and foreign reinsurers, which produce their business either on a

direct basis or through the broker market. These competitors include Swiss Re, Munich Re, Berkshire Hathaway, Partner Re and others.

In recent years, various institutional investors have increasingly sought to participate in the property and casualty insurance and reinsurance industries.

Well-capitalized new entrants to the property and casualty insurance and reinsurance industries, or existing competitors that receive substantial infusions of
capital, provide increasing competition, which may

adversely impact our business and profitability. Further, an expanded supply of reinsurance capital may lower costs for insurers that rely on reinsurance and, as
a consequence, those insurers may be able to price their products more competitively.

Human Capital Resources

As of January 15, 2023, we employed 8,186 individuals. Of this number, our subsidiaries employed 8,049 individuals and the remaining individuals

were employed at the parent company.

We believe that our people are our greatest asset and that our corporate culture is the most important intangible driver of long-term value creation for our

Company and the highest priority for pursuing long-term risk-adjusted returns and growth in stockholder value.

Human Capital Management: The Company fosters a performance culture. We are focused on creating a respectful, rewarding, diverse, and inclusive

work environment that allows our employees to build meaningful and productive careers. The success of these human capital management objectives is
essential to our strategy, as it is our people who drive our success. We invest in their growth as individuals and professionals through training and engagement,
as well as in their well-being through robust health and wellness programs and a commitment to diversity.

The Company provides developmental opportunities for our employees through formal and informal programs that focus on enabling employees to build
skills and thought leadership in specific facets of our business. Our leadership programs cultivate the talent of our high-potential, strong-performing employees
as we strive to deepen, enhance and diversify the Company’s leadership team.

We strive to align employee incentives with the risk and performance frameworks of the Company. The Company’s “pay for performance” philosophy

connects individual, business and Company results to employee compensation, providing employees with opportunities to share in the Company’s overall
growth and success. The Company offers employees a comprehensive benefits package, including health and wellness, financial, educational and life
management benefits. In addition, we support employees in making an impact in their local communities and globally through environmental and social efforts
that are meaningful to them.

Our Board of Directors engages with our senior leadership team, including our senior vice president - human resources, on a periodic basis across a

range of human capital management issues, including succession planning and development, compensation, benefits, talent recruiting and retention,
engagement, diversity and inclusion, and employee feedback.

Culture: The Board of Directors has recognized Accountability, People Oriented Strategy, Responsible Financial Practices, Risk-Adjusted Returns and
Transparency as the elements of corporate culture necessary for the Company to achieve success. Our culture unifies our employees across our decentralized
business model, positions us to serve our diverse clients globally and propels the Company’s continuous evolution.

We are committed to fostering a unifying culture and encouraging innovation across our enterprise. Our culture encompasses the beliefs that (i)
specialized knowledge and having a customer-centric focus are competitive advantages and (ii) an environment that promotes integrity, embraces the
commitment to “always do right,” fosters entrepreneurship and innovation, and values making thoughtful decisions for the long-term benefit of our enterprise.
While there is no one “Berkley” way, each of our businesses has its own culture that embodies a shared set of values that define our enterprise. Our structure,
with more than 55 distinct businesses, facilitates the prompt identification of and appropriate action with respect to addressing individual business or cultural
issues arising within a business, without affecting the larger enterprise. Furthermore, our businesses are overseen by senior corporate business managers and
senior corporate functional managers, including actuarial, claims, underwriting, compliance and finance, providing a governance oversight structure that makes
it easier to identify such issues. Because our Board of Directors diligently exercises its risk management oversight through, among other activities, regular
interactions with employees beyond corporate senior management, our directors have visibility into and receive timely feedback on cultural issues that may
affect our business.

As significant owners of our Company who are required to hold their shares until separation from service, each of our directors and senior executives

have a vested interest in cultivating talent and perpetuating a culture that facilitates the execution of our long-term objectives.

Other Information about the Company's Business

We maintain an interest in the acquisition and startup of complementary businesses and continue to evaluate possible acquisitions and new ventures on

an ongoing basis. In addition, our businesses develop new coverages or enter lines of business to meet the needs of insureds.

Seasonal weather variations and other events affect the severity and frequency of losses sustained by the insurance and reinsurance businesses. Although

the effect on our business of catastrophes such as tornadoes, hurricanes, hailstorms, wildfires, earthquakes and terrorist acts may be mitigated by reinsurance,
they nevertheless can have a significant impact on the results of any one or more reporting periods.

We have no customer that accounts for 10 percent or more of our consolidated revenues.

Compliance by W. R. Berkley and its subsidiaries with federal, state and local provisions that have been enacted or adopted regulating the discharge of
materials into the environment, or otherwise relating to protection of the environment, has not had a material effect upon our capital expenditures, earnings or
competitive position.

The Company's internet address is www.berkley.com. The information on our website is not incorporated by reference in this annual report on Form 10-
K. The Company's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act and other reports filed by us or with respect to our securities by others are accessible free of
charge through this website as soon as reasonably practicable after they have been electronically filed with or furnished to the SEC.

ITEM 1A. RISK FACTORS

Our businesses face significant risks. If any of the events or circumstances described as risks below occur, our businesses, results of operations and/or

financial condition could be materially and adversely affected. In addition to those described below, our businesses may also be adversely affected by risks and
uncertainties not currently known to us or that we currently consider immaterial.

Risks Relating to Our Industry

Our results may fluctuate as a result of many factors, including cyclical changes in the insurance and reinsurance industry.

The results of companies in the property casualty insurance industry historically have been subject to significant fluctuations and uncertainties in
demand and pricing, causing cyclical changes in the insurance and reinsurance industry. The demand for insurance is influenced primarily by general economic
conditions, while the supply of insurance is often directly related to available capacity or the perceived profitability of the business. We have faced significant
competition in our business as a result of existing insurers seeking to gain or maintain market share as well as new entrants and capital providers. Recently,
premium rates have increased for most lines of business, while they have decreased in others, most notably workers' compensation. The adequacy of premium
rates is affected mainly by the severity and frequency of claims, which are influenced by many factors, including natural disasters, regulatory measures and
court decisions that define and expand the extent of coverage, and the effects of economic and social inflation on the amount of claims payments due for
injuries or losses. In addition, investment rates of return impact rate adequacy. These factors can have a significant impact on ultimate profitability because a
property casualty insurance policy is priced before its costs are known as premiums usually are determined long before claims are reported. These factors could
produce results that would have a negative impact on our results of operations and financial condition.

We face significant competitive pressures in our businesses, which can pressure premium rates in certain areas and could harm our ability to

maintain or increase our profitability and premium volume in some parts of our business.

We compete with a large number of other companies in our selected lines of business. We compete, and will continue to compete, with major U.S. and

non-U.S. insurers and reinsurers, other regional companies, as well as mutual companies, specialty insurance companies, underwriting agencies, diversified
financial services companies and insurtech companies. Competitiveness in our businesses is based on many factors, including premium charges, ratings
assigned by independent rating agencies, commissions paid to producers, the perceived financial strength of the company, other terms and conditions offered,
services provided, ease of doing business, speed of claims payment and reputation and experience in the lines to be written. Periods of insurance industry
consolidation may further increase competition in some parts of our business and may cause our insurance subsidiaries to incur greater customer retention and
acquisition expenses, affecting the profitability of existing and new business.

Some of our competitors, particularly in the reinsurance business, have greater financial and/or marketing resources than we do. These competitors

within the reinsurance market include Swiss Re, Munich Re, Berkshire Hathaway and Partner Re. We expect that perceived financial strength, in particular,
will become more important as customers seek high quality reinsurers.

Recently, insurance prices have generally increased for most lines of business, excluding workers' compensation. However, loss costs have also
increased and the duration and magnitude of the improving pricing environment remains uncertain. Despite rising interest rates, current price levels for certain
lines of business may remain below the prices required for us to achieve our long-term return objectives. We expect to continue to face strong competition in
our business.

In recent years, various types of investors have increasingly sought to participate in the property and casualty insurance and reinsurance industries. Well-
capitalized new entrants to the property and casualty insurance and reinsurance industries, or existing competitors that receive substantial infusions of capital or
access to third-party capital, provide increasing competition, which may adversely impact our business and profitability. Further, an expanded supply of capital
may lower costs for insurers and, as a consequence, those insurers may be able to price their products more competitively. In addition, technology companies or
other third parties have created, and may in the future create, technology-enabled business models, processes, platforms or alternate distribution channels that
may adversely impact our competitive position in some parts of our business.

This intense competition could cause the supply and/or demand for insurance or reinsurance to change, which affect our ability to price our products at

attractive rates and retain existing business or write new products at adequate rates or on terms and conditions acceptable to us. If we are unable to retain
existing business or write new business at adequate rates or on terms and conditions acceptable to us, our results of operations could be materially and
adversely affected.

Our actual claims losses may exceed our reserves for claims, which may require us to establish additional reserves.

Our gross reserves for losses and loss expenses were approximately $17.0 billion as of December 31, 2022. Our loss reserves reflect our best estimates

of the cost of settling claims and related expenses with respect to insured events that have occurred.

Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what management expects the ultimate settlement

and claims administration will cost for claims that have occurred, whether known or unknown. The major assumptions about anticipated loss emergence
patterns are subject to unanticipated fluctuation. These estimates, which generally involve actuarial projections, are based on management's assessment of facts
and circumstances then known, as well as estimates of future trends in claims severity and frequency, inflation, judicial theories of liability, reinsurance
coverage, legislative changes and other factors, including the actions of third parties, which are beyond our control.

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 and settlement is reached. In periods with increased economic volatility, it becomes more difficult to accurately estimate
claim costs. It is especially difficult to estimate the impact of inflation on loss reserves given the current economic environment and related government
actions. Both inflation overall and medical cost inflation, which has historically been greater than inflation overall, can have an adverse impact. In addition,
although the Company has estimated the potential COVID-19 impact to its contingency and event cancellation, workers’ compensation, and other lines of
business under a number of possible scenarios, there remains uncertainty around COVID-19's ultimate impact on the Company and its related reserves.

Reserve estimates are continually refined in an ongoing process as experience develops and further claims are reported and settled. Adjustments to

reserves are reflected in the results of the periods in which such estimates are changed. Because setting reserves is inherently uncertain, we cannot assure that
our current reserves will prove adequate in light of subsequent events. Should we need to increase our reserves, our pre-tax income for the reporting period
would decrease by a corresponding amount.

We discount our reserves for excess and assumed workers' compensation business because of the long period of time over which losses are paid.
Discounting is intended to appropriately match losses and loss expenses to income earned on investment securities supporting liabilities. The expected loss and
loss expense payout pattern subject to discounting is derived from our loss payout experience. Changes in the loss and loss expense payout pattern are recorded
in the period they are determined. If the actual loss payout pattern is shorter than anticipated, the discount will be reduced and pre-tax income will decrease by
a corresponding amount.

The effects of emerging claim and coverage issues on our business are uncertain.

As industry practices and economic, legal, judicial, social, technological and other environmental conditions change, unexpected and unintended issues
related to claim and coverage may emerge. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by
increasing the number or size of claims. Examples of emerging claims and coverage issues include, but are not limited to:

•

judicial expansion of policy coverage and a greater propensity to grant claimants more favorable amounts and the impact of new theories of
liability;

plaintiffs targeting property and casualty insurers, including us, in purported class action litigation relating to claims-handling and other practices;

social inflation trends, including higher and more frequent claims, more favorable judgments and legislated increases;

• medical developments that link health issues to particular causes, resulting in liability claims;

•

claims relating to unanticipated consequences of current or new technologies, including cyber security related risks;

claims relating to potentially changing climate conditions; and

increased claims due to third party funding of litigation.

In some instances, these emerging issues may not become apparent for some time after we have issued the affected insurance policies. As a result, the

full extent of liability under our insurance policies may not be known until many years after the policies are issued.

In addition, the potential passage of new legislation designed to expand the right to sue, to remove limitations on recovery, to extend the statutes of

limitations or otherwise to repeal or weaken tort reforms could have an adverse impact on our business.

The effects of these and other unforeseen emerging claim and coverage issues are difficult to predict and could harm our business and materially and

adversely affect our results of operations.

As a property casualty insurer, we face losses from natural and man-made catastrophes.

Property casualty insurers are subject to claims arising out of catastrophes that may have a significant effect on their results of operations, liquidity and

financial condition. Catastrophe losses have had a significant impact on our results. For example, catastrophe losses net of reinsurance recoveries, including
COVID-19 related losses, were $212 million in 2022, $202 million in 2021, and $340 million in 2020. Similarly, man-made catastrophes can also have a
material impact on our financial results. Depending on market conditions and other factors, we may seek to increase our writing of property casualty insurance,
and, accordingly, our exposure to catastrophic events would be increased.

Catastrophes can be caused by various events, including hurricanes, windstorms, earthquakes, tsunamis, hailstorms, explosions, severe winter weather

and fires, pandemics, as well as terrorist and other man-made activities, including drilling, mining and other industrial accidents, the bankruptcy of a major
company, war or other military actions, social unrest,
cyber events or terrorist activities. The incidence and severity of catastrophes are inherently unpredictable, and longer-term natural catastrophe trends may be
changing due to climate change causing increased variability and unpredictability. The extent of losses from a catastrophe is a function of both the total amount
of insured exposure in the area affected by the event and the severity of the event. Some catastrophes are restricted to small geographic areas; however,
hurricanes, earthquakes, tsunamis and other disasters may produce significant damage in large, heavily populated areas. Catastrophes can cause losses in a
variety of our property and casualty lines, and most of our past catastrophe-related claims have resulted from severe storms. Seasonal weather variations or the
impact of climate change may affect the severity and frequency of our losses. Insurance companies are not permitted to reserve for a catastrophe until it has
occurred. It is therefore possible that a catastrophic event or multiple catastrophic events could produce significant losses and have a material adverse effect on
our results of operations and financial condition.

The COVID-19 pandemic has previously materially and adversely affected our results of operations, and, whether as a result of COVID-19's long-

term effects, or new or emerging variants, or other potential pandemics, may further materially and adversely affect our results of operations, financial
position and liquidity in the future.

The ongoing COVID-19 pandemic, including the related impact on the U.S. and global economies, materially and adversely affected our results of

operations. The pandemic and its impact on our business may continue, and potentially even worsen, whether as a result of COVID-19's long-term effects, or
new or emerging variants, or even other potential pandemics. We cannot predict the magnitude or duration of such impact, particularly given the uncertainties
associated with COVID-19, including regarding the U.S. and global economies and the recovery from its devastating economic and other effects. The ultimate
impact of COVID-19 on our results of operations, financial position and liquidity is not yet known, but includes the following:

Adverse Legislative and Regulatory Action. Legislative and regulatory initiatives in response to COVID-19 or other similar pandemics may adversely

affect us, particularly in our workers’ compensation and property coverages businesses. For

example, our business may be subject to, certain initiatives, including, but not limited to: legislative and regulatory action that seeks to retroactively mandate
coverage for losses that our insurance policies would not otherwise cover and which were not priced to cover; legislative and regulatory action providing for
shifting presumptions with respect to the burdens of proof for “essential” workers on workers’ compensation coverages and varying definitions of “essential”
workers; actions prohibiting us from cancelling insurance policies in accordance with our policy terms or non-renewing policies at their natural expiration;
and/or orders to provide premium refunds, grant extended grace periods for premium payments, and provide extended time to pay past due premiums. Any
such action would likely increase both our underwriting losses and our expenses and any legal challenges to any such action could take years to resolve.

Claim Losses Related to COVID-19 May Exceed Reserves. As of December 31, 2022, we recorded approximately $341 million for COVID-19-

related losses. Our reserves do not represent an exact calculation of liability, but represent an estimate of what management expects the ultimate settlement and
claims administration will cost for claims that have occurred, whether known or unknown. Accordingly, given the uncertainties still associated with COVID-19
and its impact, our reserves and the underlying estimated level of claim losses and costs arising from COVID-19 may materially change.

Claim Losses and Adjustment Expenses May Increase. As the effects of COVID-19 on industry practices and economic, legal, judicial, social and

other environmental conditions occur, unexpected and unintended issues related to claims and coverages may emerge. These issues may adversely affect our
business by extending coverage beyond our underwriting intent (including in the area of property coverages where physical damage requirements and
communicable disease exclusions are currently being challenged) or by increasing the number and/or size of claims, each of which could adversely impact our
results.

Reinsurance. We purchase reinsurance in order to transfer part of the risk that we have assumed by writing insurance policies to reinsurance

companies in exchange for part of the premium we receive in connection with assuming such risk. Although reinsurance makes the reinsurer contractually
liable to us to the extent the risk is transferred to the reinsurer, it does not relieve us of our liability to our policyholders. There may be uncertainty surrounding
the availability of reinsurance coverage for COVID-19-related losses as our reinsurers may dispute the applicability of reinsurance to such losses (including the
application of reinsurance reinstatements) and, as a result, our reinsurers may refuse to pay reinsurance recoverables related thereto or they may not pay them
on a timely basis. In addition, we may be unable to renew our current reinsurance coverages or obtain appropriate new reinsurance covers with respect to
certain exposures under our policies, including COVID-19-related exposures, and therefore our net exposures could increase, or if we are unwilling to bear
such increase in net exposure, we may reduce our level of underwriting commitments.

Premium Volumes May Be Negatively Impacted. The demand for insurance is significantly influenced by general economic conditions. Consequently,

any reduced economic activity relating to COVID-19 or other potential pandemics is likely to decrease demand for our insurance products and services and
negatively impact our premium volumes (and, in certain cases, may result in return of premiums due to a decrease in exposures). This may continue for an
indefinite period, with the magnitude of the impact impossible to predict. In addition, as we continue to evaluate the effects of COVID-19 on the insurance
coverages we currently offer, our appetite for providing certain coverages in various jurisdictions may change, which could further negatively impact our
premium volumes. Any such reduction in our premiums would likely cause our expense ratio to rise.

Investments. Further disruptions in global financial markets due to the continuing impact of COVID-19 or future pandemics could cause us to incur

additional unrealized and/or realized investment losses, including impairments in our fixed maturity portfolio and other investments. In addition, the economic
uncertainty may result in a decline in interest rates, which may negatively impact our net investment income from future investment activity.

Operational Disruptions and Costs. Our operations could be disrupted if key members of our senior management or a significant percentage of our

workforce or the workforce of our agents, brokers, suppliers or other third party service providers are unable to continue to work because of illness,
government directives or otherwise. In addition, our agents, brokers, suppliers and other third party service providers, which we rely on for key aspects of our
operations, are subject to similar risks and uncertainties, which may interfere with their ability to fulfill their respective commitments and responsibilities to us
in a timely manner and in accordance with the agreed-upon terms. Any remote working policies we implement may result in disruptions to our business
routines, heightened risk to cybersecurity attacks and data security incidents and a greater dependency on internet and telecommunication access and
capabilities.

Changing climate conditions may alter the frequency and increase the severity of catastrophic events and thereby adversely affect our financial

condition and results.

Over the past several years, changing weather patterns and climatic conditions, such as global warming, appear to have contributed to the

unpredictability, frequency and severity of natural disasters and created additional uncertainty as to future

trends and exposures. There is a growing scientific consensus that global warming and other climate change are altering the frequency, severity and peril
characteristics of catastrophic weather events, such as hurricanes, windstorms, floods and other natural disasters. Such changes make it more difficult for us to
predict and model catastrophic events, reducing our ability to accurately price our exposure to such events and mitigate our risks. Any increase in the frequency
or severity of natural disasters may adversely affect our financial condition and results.

We, as a primary insurer, may have significant exposure for terrorist acts.

To the extent an act of terrorism, whether a domestic or foreign act, is certified by the Secretary of Treasury, we may be covered under the Terrorism

Risk Insurance Program Reauthorization Act of 2019 (“TRIPRA”), for up to 80% of our covered losses for certain property/casualty lines of insurance.
However, any such coverage would be subject to a mandatory deductible based on 20% of earned premium for the prior year for the covered lines of
commercial property and casualty insurance. Based on our 2022 earned premiums, our aggregate deductible under TRIPRA during 2023 is approximately
$1,310 million. In addition, the coverage provided under TRIPRA does not apply to reinsurance that we write. To the extent that our reinsurers have excluded
coverage for certain terrorist acts or have priced this coverage at rates that make purchasing such coverage economically infeasible, we may not have
reinsurance protection and could be exposed to potential losses as a result of any acts of terrorism.

We are exposed to, and may face adverse developments involving, mass tort claims.

We are exposed to, and may face adverse developments involving, mass tort claims such as those relating to exposure to potentially harmful products
or substances. We face potential exposure to mass tort claims, including claims related to exposure to potentially harmful products or substances, such as lead
paint, polyfluoroalkyl substances, talc and opioids. Establishing loss reserves for mass tort claims is subject to uncertainties because of many factors, including
adverse changes to the tort environment (e.g., increased and more aggressive attorney involvement in insurance claims, increased litigation, expanded theories
of liability, higher jury awards, lawsuit abuse and third-party litigation finance, among others); evolving judicial interpretations, including application of
various theories of joint and several liabilities; disputes concerning medical causation with respect to certain diseases; geographical concentration of the
lawsuits asserting the claims; and the potential for a large rise in the total number of claims without underlying epidemiological developments suggesting an
increase in disease rates. Because of the uncertainties set forth above, additional liabilities may arise for amounts in excess of the current loss reserves. In
addition, our estimate of loss reserves may change. These additional liabilities or increases in estimates, or a range of either, could vary significantly from
period to period and could materially and adversely affect our results of operations and/or our financial position.

We are subject to extensive governmental regulation, which increases our costs and could restrict the conduct of our business.

We are subject to extensive governmental regulation and supervision in both the United States and foreign jurisdictions. Most insurance regulations

are designed to protect the interests of policyholders rather than stockholders and other investors. This system of regulation, generally administered in the
United States by a department of insurance in each state in which we do business, relates to, among other things:

•

standards of solvency, including risk-based capital measurements;

restrictions on the nature, quality and concentration of investments;

limitations on the amount of dividends, tax distributions, intercompany loans and other payments that can be made without prior regulatory
approval;

requirements pertaining to certain methods of accounting;

evaluating enterprise risk to an insurer;

rate and form regulation pertaining to certain of our insurance businesses;

potential assessments for the provision of funds necessary for the settlement of covered claims under certain policies provided by impaired,
insolvent or failed insurance companies; and

involvement in the payment or adjudication of catastrophe or other claims beyond the terms of the policies.

State insurance departments conduct periodic examinations of the affairs of insurance companies and require the filing of annual and other reports

relating to the financial condition of insurance companies, holding company issues and other matters. Our Insurance business internationally is also generally
subject to a similar regulatory scheme in each of the jurisdictions where we conduct operations outside the United States.

Federal financial services modernization legislation and legislative and regulatory initiatives taken or which may be taken in response to conditions in

the financial markets, global insurance supervision and other factors may lead to additional federal regulation of the insurance industry in the coming years.

The Dodd-Frank Act effected sweeping changes to financial services regulation in the United States. The Dodd-Frank Act established the Financial

Stability Oversight Council (“FSOC”), which is authorized to recommend that certain systemically significant non-bank financial companies, including
insurance companies, be regulated by the Board of Governors of the Federal Reserve. The Dodd-Frank Act also established a Federal Insurance Office (“FIO”)
which is authorized to study, monitor and report to Congress on the U.S. insurance industry and the significance of global reinsurance to the U.S. insurance
market. The FIO also can recommend that the FSOC designate an insurer as an entity posing risks to the United States financial stability in the event of the
insurer's material financial distress or failure. Our business could be affected by changes, whether as a result of potential changes to the Dodd-Frank Act, to the
U.S. system of insurance regulation or our designation or the designation of insurers or reinsurers with which we do business as systemically significant non-
bank financial companies.

The topic of climate risk has come under increased scrutiny by the NAIC and insurance regulators. For instance, in New York, the NYDFS issued a
circular letter in September 2020 that applies to both New York domestic and foreign authorized insurers, such as our insurance subsidiaries licensed in New
York. The circular letter states that the NYDFS expects these insurers to integrate financial risks related to climate change into their governance frameworks,
risk management processes, business strategies and scenario analysis, and develop their approach to climate-related financial disclosure. The NYDFS also
amended the regulation governing enterprise risk management, which applies to our insurance subsidiaries licensed in New York, that requires an insurance
group's enterprise risk management function to address certain additional risks, including climate change risk. In addition, the FIO is assessing how the
insurance sector may help mitigate climate-related risks and achieve national climate-related goals. These measures may subject us to increased oversight at the
state and federal level.

State regulation is the primary form of regulation of insurance and reinsurance in the United States, although Congress has considered various

proposals regarding federal regulation of insurance, in addition to the changes brought about by the Dodd-Frank Act, such as proposals for the creation of an
optional federal charter for insurance companies. We may be subject to potentially increased federal oversight as a financial institution. In addition, the current
U.S. administration and the volatile political environment may increase the chance of other federal legislative and regulatory changes that could affect us in
ways we cannot predict.

With respect to international measures, Solvency II, the EU regime concerning the capital adequacy, risk management and regulatory reporting for

insurers and reinsurers may affect our insurance businesses. Implementation of Solvency II in EU member states occurred on January 1, 2016, and as the
Solvency II regime evolves over time, we may be required to utilize a significant amount of resources to ensure compliance. In particular, the European
Commission has undertaken a review of Solvency II and on September 22, 2021, published a package of proposed legislative reforms for amending the
existing regulatory framework. The European Council published its agreed position on the European Commission’s proposed reforms in June 2022, and it is
now discussing this proposed legislation with the European Parliament. In addition, despite the waiver of the Solvency II group capital requirements we
received, Solvency II may have the effect of increasing the capital requirements of our EU domiciled insurers. Additionally, our capital requirements and
compliance requirements may be adversely affected if the European Commission does not deem the insurance regulatory regimes of the jurisdictions outside
the EU in which we have insurance or reinsurance companies domiciled to be “equivalent” to Solvency II.

Similar considerations apply to our U.K. subsidiaries, which are now subject to a separate U.K. prudential regime, which is broadly identical to

Solvency II. However, the two regimes, and their respective requirements, are likely to diverge in the near future due to both the EU’s review of Solvency II
described above and HM Treasury’s publication of a finalized package of reforms to the U.K.’s domestic prudential regime on November 17, 2022 (please see
“International Regulation” above for more information). We therefore may be required to utilize additional resources to ensure compliance with the different
rules in each regime.

If our compliance with Solvency II, the U.K.’s prudential regime or any other regulatory regime is challenged, we may be subject to monetary or other

penalties. In addition, in order to ensure compliance with applicable regulatory requirements or as a result of any investigation, including remediation efforts,
we could be required to incur significant expenses and undertake additional work, which in turn may divert resources from our business.

We may be unable to maintain all required licenses and approvals and our business may not fully comply with the wide variety of applicable laws and

regulations or the relevant authority's interpretation of the laws and regulations. Also, some regulatory authorities have relatively broad discretion to grant,
renew or revoke licenses and approvals. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, the
insurance regulatory authorities

could preclude or temporarily suspend us from carrying on some or all of our activities or monetarily penalize us. Also, changes in the level of regulation of the
insurance industry, whether federal, state or foreign, or changes in laws or regulations themselves or interpretations thereof by regulatory authorities, may
further restrict the conduct of our business.

Risks Relating to Our Business

Our expanding international operations expose us to increased investment, political, legal/regulatory, and economic risks, including foreign

currency and credit risk.

Our expanding international operations in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, the Asia-Pacific
region, South Africa and Australia expose us to increased investment, political, legal/regulatory, and economic risks, including foreign currency and credit risk.
Changes in the value of the U.S. dollar relative to other currencies could have an adverse effect on our results of operations and financial condition.

Our investments in non-U.S.-denominated assets are subject to fluctuations in non-U.S. securities and currency markets, and those markets can be

volatile. Non-U.S. currency fluctuations also affect the value of any dividends paid by our non-U.S. subsidiaries to their parent companies in the U.S.

We face additional risks as a result of our international operations which could have an adverse effect on our results of operations and financial condition

including: burdens and costs of compliance with a variety of foreign laws and regulations and the associated risk and costs of non-compliance; exposure to
undeveloped or evolving legal systems, which may result in unpredictable or inconsistent application of laws and regulations; exposure to commercial,
political, legal or regulatory corruption; political, economic or other instability in countries in which we conduct business, including possible terrorist acts; the
imposition of tariffs, trade barriers or other protectionist laws or business practices that favor local competition, increased costs and adverse effects on our
business; changes to visa or immigration policies; diminished ability to enforce our contractual rights; potential increased risk of data breaches; differences in
cultural environments; sociopolitical instability; social, political or economic instability resulting from climate change; changes in regulatory requirements,
including changes in regulatory treatment of certain products or services; exposure to local economic conditions and its impact on our clients’ performance and
creditworthiness; and restrictions on the repatriation of non-U.S. investments and earnings.

Our U.K. business could be specifically adversely impacted by the imposition of trade barriers between the EU and the U.K. following Brexit, which has

already reduced the level of trade between the two markets and the U.K.’s overall trade exports, thereby negatively affecting the attractiveness of the U.K.
market.

We may be unable to attract and retain key personnel and qualified employees.

We depend on our ability to attract and retain key personnel, including our President and CEO, Executive Chairman, senior executive officers, presidents

of our businesses, experienced underwriters and other skilled employees who are knowledgeable about our business. If the quality of our underwriting team
and other personnel decreases, we may be unable to maintain our current competitive position in the specialized markets in which we operate, and be unable to
expand our operations into new products and markets.

We cannot guarantee that our reinsurers will pay in a timely fashion, if at all, and, as a result, we could experience losses.
We purchase reinsurance by transferring part of the risk that we have assumed, known as ceding, to a reinsurance company in exchange for part of the

premium we receive in connection with the risk. Although reinsurance makes the reinsurer contractually liable to us to the extent the risk is transferred or ceded
to the reinsurer, it does not relieve us, the reinsured, of our liability to our policyholders. Our reinsurers may not pay the reinsurance recoverables that they owe
to us or they may not pay such recoverables on a timely basis. This failure to pay or failure to pay on a timely basis may be due to factors such as whether
reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or
contract. Accordingly, we bear credit risk with respect to our reinsurers, and if our reinsurers fail to pay us, our financial results would be adversely affected.
Underwriting results and investment returns of some of our reinsurers may affect their future ability to pay claims. As of December 31, 2022, the amount due
from our reinsurers was approximately $3,188 million, including amounts due from state funds and industry pools where it was intended that we would bear no
risk. Certain of these amounts are secured by letters of credit or by funds held in trust on our behalf.

We are subject to credit risk relating to our policyholders, independent agents and brokers.

In addition to exposure to credit risk related to our reinsurance recoverables and investment portfolio, we are exposed to credit risk in several other areas

of our business, including credit risk relating to policyholders, independent agents and brokers. For example our policyholders, independent agents or brokers
may not pay a part of or the full amount of premiums owed to us

or our brokers or other third party claim administrators may not deliver amounts owed on claims under our insurance and reinsurance contracts for which we
have provided funds.

As credit risk is generally a function of the economy, we face a greater credit risk in an economic downturn. While we attempt to manage credit risks

through underwriting guidelines, collateral requirements and other oversight mechanisms, our efforts may not be successful. For example, to reduce such credit
risk, we require certain third parties to post collateral for some or all of their obligations to us. In cases where we receive pledged securities and the applicable
counterparty is unable to honor its obligations, we may be exposed to credit risk on the securities pledged and/or the risk that our access to that collateral may
be stayed as a result of bankruptcy. In cases where we receive letters of credit from banks as collateral and one of our counterparties is unable to honor its
obligations, we are exposed to the credit risk of the banks that issued the letters of credit.

We are rated by A.M. Best, Standard & Poor's, Moody's, and Fitch, and a decline in these ratings could affect our standing in the insurance industry

and cause our sales and earnings to decrease.

Ratings have become an increasingly important factor in establishing the competitive position of insurance companies. Certain of our insurance
company subsidiaries are rated by A.M. Best, Standard & Poor's, Moody's and Fitch. Our ratings are subject to periodic review, and we cannot assure you that
we will be able to retain our current or any future ratings, especially given that rating agencies may change their criteria or increase capital requirements for
various rating levels. For instance, Standard & Poor's has recently proposed changes to its rating model which could impact our rating depending on final
changes that are implemented.

If our ratings are reduced from their current levels by A.M. Best, Standard & Poor's, Moody's or Fitch, our competitive position in the insurance industry

could suffer and it would be more difficult for us to market our products. A ratings downgrade could also adversely limit our access to capital markets, which
may increase the cost of debt. A significant downgrade could result in a substantial loss of business as policyholders move to other companies with higher
financial strength ratings.

If market conditions cause reinsurance to be more costly or unavailable, we may be required to bear increased risks or reduce the level of our

underwriting commitments.

As part of our overall risk and capacity management strategy, we purchase reinsurance for certain amounts of risk underwritten by our insurance

company subsidiaries, especially catastrophe risks and those risks with relatively high policy limits. We also purchase reinsurance on risks underwritten by
others which we reinsure. Market conditions beyond our control determine the availability and cost of the reinsurance protection we seek to purchase, which
may affect the level of our business and profitability. Our reinsurance contracts are generally subject to annual renewal, and we may be unable to maintain our
current reinsurance contracts or to obtain other reinsurance contracts in adequate amounts and at favorable rates. In addition, we may be unable to obtain
reinsurance on terms acceptable to us relating to certain lines of business that we intend to begin writing. If we are unable to renew our expiring contracts or to
obtain new reinsurance contracts, either our net exposures would increase or, if we are unwilling to bear an increase in net exposures, we would have to reduce
the level of our underwriting commitments, especially catastrophe exposed risks.

Depending on conditions in the financial markets and the general economy, we may be unable to raise debt or equity capital if needed.

If conditions in the financial markets and the general economy are unfavorable, which may result from disruptions, uncertainty or volatility in the capital
and credit markets, we may be unable to access debt or equity capital on acceptable terms if needed, which could have a negative impact on our ability to invest
in our insurance company subsidiaries and/or to take advantage of opportunities to expand our business, such as possible acquisitions and the creation of new
ventures, and inhibit our ability to refinance our existing indebtedness if we desire to do so, on terms acceptable to us.

We may not find suitable acquisition candidates or new insurance ventures and even if we do, we may not successfully integrate any such acquired

companies or successfully invest in such ventures.

As part of our present strategy, we continue to evaluate possible acquisition transactions and the start-up of complementary businesses on an ongoing
basis, and at any given time we may be engaged in discussions with respect to possible acquisitions and new ventures. We cannot assure you that we will be
able to identify suitable acquisition targets or insurance ventures, that such transactions will be financed and completed on acceptable terms or that our future
acquisitions or start-up ventures will be successful. Our financial results could be adversely affected by acquired businesses not performing as projected,
unforeseen liabilities, routine and unanticipated transaction-related charges, diversion of management time and resources to acquisition integration challenges
or growth strategies, loss of key employees, challenges in integrating information technology systems of acquired companies with our own, amortization of
expenses related to intangibles, charges

for impairment of long-term assets or goodwill and indemnification. The process of integrating any companies we do acquire or investing in new ventures may
have a material adverse effect on our results of operations and financial condition.

If we experience difficulties with our information technology, telecommunications or other computer systems, our ability to conduct our business

could be negatively or severely impacted.

Our business is highly dependent upon our employees' ability to perform necessary business functions in an efficient and uninterrupted fashion. A shut-
down of, or inability to access, one or more of our facilities, a power outage or a failure of one or more of our information technology, telecommunications or
other computer systems could significantly impair our employees' ability to perform such functions on a timely basis. In the event of a disaster such as a natural
catastrophe, terrorist attack or industrial accident, or the infection of our systems by a malicious computer virus, our systems could be inaccessible for an
extended period of time. In addition, because our information technology and telecommunications systems interface with and depend on third-party systems,
we could experience service denials or failures of controls if demand for our service exceeds capacity or a third-party system fails or experiences an
interruption. If our business continuity plans or system security does not sufficiently address such a business interruption, system failure or service denial, our
ability to write and process new and renewal business, provide customer service, pay claims in a timely manner or perform other necessary business functions
could be significantly impaired and our business could be harmed.

Failure to maintain the security of information technology systems and confidential data may expose us to liability.

Although we have taken steps intended to protect our data and information technology systems and mitigate the risk of harm caused by cybersecurity

incidents or breaches, no safeguards are perfect and any failure of these safeguards could cause a substantial disruption of our business operations, which could
result in service interruptions, data security compromises, regulatory action, and other similar operational and legal issues, as well as substantial remediation
and other costs. Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and
networks. Cybersecurity breaches, including physical or electronic break-ins, computer viruses, malware, attacks by hackers, ransomware attacks, phishing
attacks, supply chain attacks, breaches due to employee error or misconduct and other similar breaches can create system disruptions, shutdowns or
unauthorized access to information maintained in our information technology systems and in the information technology systems of our vendors and other third
parties. We have in the past experienced cybersecurity breaches of our information technology systems as well as the information technology systems of our
vendors and other third parties, but, to our knowledge, we have not experienced any material cybersecurity breaches. We expect cybersecurity breaches to
continue to occur in the future and we are constantly managing efforts to infiltrate and compromise our systems and data. Our electronic transmission of
personal, confidential and proprietary information to third parties with whom we have business relationships and our outsourcing of certain technology and
business process functions to third parties may expose us to enhanced risk related to data security. While we attempt to develop secure data transmission
capabilities with these third-party vendors and others with whom we do business, our vendors and third parties could still suffer data breaches that could result
in the exposure of sensitive data and the infiltration of our computer systems. Our failure to effectively protect sensitive personal and/or proprietary
information, whether owing to breaches of our own systems or those of our vendors and other third parties, could result in significant monetary and
reputational damages, material adverse effects to our financial condition, costly litigation, or other regulatory enforcement actions. These increased risks, and
expanding regulatory requirements regarding data security, including required compliance with the GDPR, CCPA, CPRA and additional state-specific privacy
statutes and regulations, could expose us to data loss, monetary and reputational damages and significant increases in compliance costs. As a result, our ability
to conduct our business could be materially and adversely affected.

We could be adversely affected if our controls to ensure compliance with guidelines, policies and legal and regulatory standards are not effective.

Our business is highly dependent on our ability to engage on a daily basis in a large number of insurance underwriting, claim processing and investment

activities, many of which are highly complex. These activities often are subject to internal guidelines and policies, as well as legal and regulatory standards,
including those related to privacy, anti-corruption, anti-bribery and global finance and insurance matters. Our continued expansion into new international
markets has brought about additional requirements. A control system, no matter how well designed and operated, can provide only reasonable assurance that
the control system's objectives will be met. If our controls are not effective, it could lead to financial loss, unanticipated risk exposure (including underwriting,
credit and investment risk) or damage to our reputation.

We could be adversely affected by changes in U.S. Federal income tax laws.

Tax legislation commonly referred to as the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, fundamentally overhauled the

U.S. tax system by, among other significant changes, reducing the U.S. corporate income tax rate to 21%. In the context of the taxation of U.S.
property/casualty insurance companies such as the Company, the Act also modified the loss reserve discounting rules and the proration rules that apply to
reduce reserve deductions to reflect the lower

corporate income tax rate. It is possible that other legislation could be introduced and enacted by the current Congress or future Congresses that could have an
adverse impact on us. New regulations or pronouncements interpreting or clarifying provisions of the Act may be forthcoming. We cannot predict if, when or in
what form such regulations or pronouncements may be provided, whether such guidance will have a retroactive effect or their potential impact on us.

Limitations in risk management and loss limitation methods may adversely impact our business.

We seek to effectively manage risk and limit our losses in a variety of ways including through effective underwriting, tailoring policy terms, and the use
of reinsurance. However, there are certain limitations in these and similar tactics and as a result, loss levels may be higher than modeled or otherwise expected,
which could have a material adverse effect on our business.

Increased scrutiny on social responsibility and the efforts we take to implement related measures, or the failure to take such measures, may

adversely impact our business.

There is increased scrutiny from regulators and investors on the measures companies take to be socially responsible. Although we have made efforts to

be responsible in this manner, for example through our commitment to fostering a unifying culture and encouraging innovation across our operating units, these
types of pressures may nonetheless present challenges and have an adverse impact on our business. In addition, we may be subject to negative publicity based
on a failure or perceived failure to achieve various social responsibility initiatives and goals relating to diversity, equity and inclusion, and commitment to long-
term sustainability we may announce from time to time, or based on an actual or perceived increase in related risks as a result of our or our industry’s business
activities.

Risks Relating to Our Investments

A significant amount of our assets is invested in fixed maturity securities and is subject to market fluctuations.

Our investment portfolio consists substantially of fixed maturity securities. As of December 31, 2022, our investment in fixed maturity securities was
approximately $17.6 billion, or 72.4% of our total investment portfolio, including cash and cash equivalents. As of that date, our portfolio of fixed maturity
securities consisted of the following types of securities: U.S. Government securities (5.1%); state and municipal securities (16.8%); corporate securities
(38.1%); asset-backed securities (22.6%); mortgage-backed securities (9.4%) and foreign government (8.0%).

The fair value of these assets and the investment income from these assets fluctuate depending on general economic and market conditions. The fair
value of fixed maturity securities generally decreases as interest rates rise. If a significant increase in interest rates were to occur, the fair value of our fixed
maturity securities would be negatively impacted, while investment income earned from future investments in fixed-maturity securities would be higher.
Conversely, if interest rates decline, the fair value of our fixed-maturity securities would be positively impacted and investment income earned from future
investments in fixed maturity securities will be lower. Some fixed maturity securities, such as mortgage-backed and other asset-backed securities, also carry
prepayment risk as a result of interest rate fluctuations. In low interest rate environments, we may not be able to successfully reinvest the proceeds from
maturing securities at yields commensurate with our target performance goals.

The value of investments in fixed maturity securities is subject to impairment as a result of deterioration in the credit worthiness of the issuer, default by

the issuer (including states and municipalities) in the performance of its obligations in respect of the securities and/or increases in market interest rates. To a
large degree, the credit risk we face is a function of the economy; accordingly, we face a greater risk in an economic downturn or recession. During periods of
market disruption, it may be difficult to value certain of our securities, particularly if trading becomes less frequent and/or market data becomes less
observable. There may be certain asset classes that were in active markets with significant observable data that become illiquid due to the then current financial
environment. In such cases, more securities may require additional subjectivity and management judgment.

Although the historical rates of default on state and municipal securities have been relatively low, our state and municipal fixed maturity securities could

be subject to a higher risk of default or impairment due to declining municipal tax bases and revenue. Many states and municipalities operate under deficits or
projected deficits, the severity and duration of which could have an adverse impact on both the valuation of our state and municipal fixed maturity securities
and the issuer's ability to perform its obligations thereunder. Additionally, our investments are subject to losses as a result of a general decrease in commercial
and economic activity for an industry sector in which we invest, as well as risks inherent in particular securities.

Although we attempt to manage these risks through the use of investment guidelines and other oversight mechanisms and by diversifying our portfolio

and emphasizing preservation of principal, our efforts may not be successful. Impairments, defaults and/or rate increases could reduce our net investment
income and net realized investment gains or result in investment

losses. Investment returns are currently, and will likely continue to remain, under pressure due to economic uncertainty, more generally, and the shape of the
yield curve. As a result, our exposure to the risks described above could materially and adversely affect our results of operations, liquidity and financial
condition.

We have invested a portion of our assets in equity securities, merger arbitrage securities, investment funds, private equity, loans and real estate

related assets, which are subject to significant volatility and may decline in value.

We invest a portion of our investment portfolio in equity securities, merger arbitrage securities, investment funds, private equity, loans and real estate

related assets. At December 31, 2022, our investment in these assets was approximately $5.3 billion, or 21.6%, of our investment portfolio, including cash and
cash equivalents.

Merger and arbitrage trading securities were $0.9 billion, or 3.9% of our investment portfolio, including cash and cash equivalents at December 31,
2022. Merger arbitrage involves investing in the securities of publicly held companies that are the targets in announced tender offers and mergers. Merger
arbitrage differs from other types of investments 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. Our merger arbitrage positions are exposed to the risk associated with the completion of announced deals, which are
subject to regulatory as well as political and other risks.

Real estate related investments, including directly owned, investment funds and loans receivable, were $1.7 billion, or 7.1% of our investment portfolio,
including cash and cash equivalents, at December 31, 2022. We also invest in real estate, financial services, energy, transportation and other investment funds.
The values of these investments are subject to fluctuation based on changes in the economy and interest rates in general and the related asset valuations in
particular. In addition, our investments in real estate related assets and other alternative investments are less liquid than our other investments.

These investments are subject to significant volatility as a result of the conditions in the financial and commodity markets and the global economy.

Risks Relating to Limitations on Dividends from Subsidiaries and Anti-Takeover Provisions

We are an insurance holding company and, therefore, may not be able to receive dividends in needed amounts.
As an insurance holding company, our principal assets are the shares of capital stock of our insurance company subsidiaries. We have to rely on
dividends from our insurance company subsidiaries to meet our obligations for paying principal and interest on outstanding debt obligations, paying dividends
to stockholders and repurchasing our shares and paying corporate expenses. The payment of dividends by our insurance company subsidiaries is subject to
regulatory restrictions and competitive pressures on maintaining financial strength ratings and will depend on the surplus and future earnings of these
subsidiaries. During 2023, the maximum amount of dividends that can be paid without regulatory approval is approximately $1.2 billion. Future regulatory
actions could further restrict our insurance subsidiaries’ ability to pay us dividends. As a result, in the future we may not be able to receive dividends from these
subsidiaries at times and in amounts necessary to meet our obligations, pay dividends or repurchase shares.

Laws and regulations of the jurisdictions in which we conduct business could delay, deter or prevent an attempt to acquire control of us that

stockholders might consider to be desirable, and may restrict a stockholder's ability to purchase our common stock.

Generally, United States insurance holding company laws require that, before a person can acquire control of an insurance company, prior written
approval must be obtained from the insurance regulatory authority in the state in which that insurance company is domiciled. Pursuant to applicable laws and
regulations, “control” over an insurer is generally presumed to exist if any person, directly or indirectly, owns, controls, holds the power to vote, or holds
proxies representing 10% or more of the voting securities of that insurer or any parent company of such insurer. Indirect ownership includes ownership of the
shares of our common stock. Thus, the insurance regulatory authorities of the states in which our insurance subsidiaries are domiciled are likely to apply these
restrictions on acquisition of control to any proposed acquisition of our common stock. Some states require a person seeking to acquire control of an insurer
licensed but not domiciled in that state to make a filing prior to completing an acquisition if the acquirer and its affiliates, on the one hand, and the target
insurer and its affiliates, on the other hand, have specified market shares in the same lines of insurance in that state. Additionally, many foreign jurisdictions
where we conduct business impose similar restrictions and requirements.

These provisions can also lead to the imposition of conditions on an acquisition that could delay or prevent its consummation. These laws may
discourage potential acquisition proposals and may delay, deter or prevent a change in control of us through transactions, and in particular unsolicited
transactions, that some or all of our stockholders might consider to be desirable.

Certain provisions in our organizational documents may have the effect of hindering, delaying or preventing third party takeovers and thus may

prevent our stockholders from receiving premium prices for their shares in an unsolicited takeover or make it more difficult for third parties to replace our
current management.

Provisions of our Restated Certificate of Incorporation and By-Laws, as well as state insurance statutes, may hinder, delay or prevent unsolicited
acquisitions or changes of our control. These provisions may also have the effect of making it more difficult for third parties to cause the replacement of our
current management without the concurrence of our board of directors.

These provisions include:
•

our classified board of directors and the ability of our board to increase its size and to appoint directors to fill newly created directorships;

•

the requirement that the holders of 80% of our shares must approve mergers and other transactions between us and the holder of 5% or more of our
shares, unless the transaction was approved by our board of directors prior to such holder's acquisition of 5% of our shares; and

the need for advance notice in order to raise business or make nominations at stockholders' meetings.

These provisions may discourage potential acquisition proposals and may delay, deter or prevent a change in control of us through transactions, and in

particular unsolicited transactions, that some or all of our stockholders might consider to be desirable.

ITEM 1B. UNRESOLVED STAFF COMMENTS

There are no unresolved written comments that were received from the SEC staff 180 days or more before the end of our fiscal year relating to our

periodic or current reports under the Securities Exchange Act of 1934.

ITEM 2. PROPERTIES

W. R. Berkley and its subsidiaries own or lease office buildings or office space suitable to conduct their operations. At December 31, 2022, the Company

had aggregate office space of 4,295,165 square feet, of which 1,048,136 were owned and 3,247,029 were leased.

Rental expense for the Company's operations was approximately $43,383,000, $44,051,000 and $44,291,000 for 2022, 2021 and 2020, respectively.

Future minimum lease payments, without provision for sublease income, are $32,282,796 in 2023, $33,528,105 in 2024 and $599,371,375 thereafter.

ITEM 3. LEGAL PROCEEDINGS

The Company's subsidiaries are subject to disputes, including litigation and arbitration, arising in the ordinary course of their insurance and reinsurance
businesses. The Company's estimates of the costs of settling such matters are reflected in its aggregate reserves for losses and loss expenses, and the Company
does not believe that the ultimate outcome of such matters will have a material adverse effect on its financial condition or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES

In 2022, the Board declared regular quarterly cash dividends of $0.09 per share in the first quarter, and $0.10 per share in each of the remaining three
quarters, and special dividends of $0.50 per share in the second quarter. Subject to availability, the Board currently expects to continue such regular quarterly
cash dividends.

The approximate number of record holders of the common stock on February 15, 2023 was 323.

The chart below shows a comparison of 5 year cumulative total return.

Comparison of 5 Year Cumulative Total Return
Assumes initial investment of $100 on January 1, 2017, with dividends reinvested.

As of December 31, 2022, the S&P 500® Property and Casualty Insurance Index consists of Allstate Corporation, Arch Capital Group Ltd. (added Nov. 2022), Chubb,

Ltd., Cincinnati Financial Corporation, Progressive Corporation, The Travelers Companies, Inc., and W. R. Berkley Corporation (added Dec. 2019).

W. R. Berkley Corporation
S&P 500 Index - Total Returns
S&P 500 Property and Casualty Insurance Index

Cum $
Cum $
Cum $

2017
100.00
100.00
100.00

2018
104.61
95.61
95.31

2019
150.46
125.70
119.97

2020
145.72
148.81
127.56

2021
185.56
191.48
149.90

2022
240.56
156.69
178.27

Set forth below is a summary of the shares repurchased by the Company during the fourth quarter of 2022 and the remaining number of shares

authorized for purchase by the Company during such period.

October 2022
November 2022
December 2022

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

325,596
938,494
—

69.22
69.29
—

325,596
938,494
—

14,568,100
13,629,606
13,629,606

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates

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

An important part of our strategy is to form new businesses to capitalize on various opportunities. Over the years, the Company has formed numerous

businesses 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 or social inflation on the amount of
compensation for injuries or losses. General insurance prices are also influenced by available insurance capacity, i.e., the level of capital employed in the
industry, and the industry’s willingness to deploy that capital.

The Company’s profitability is also affected by its investment income and investment gains. The Company’s invested assets are invested principally in

fixed maturity securities. The return on fixed maturity securities is affected primarily by general interest rates, as well as the credit quality and duration of the
securities.

The Company also invests in equity securities, merger arbitrage securities, investment funds, private equity, loans and real estate related assets. The

Company's investments in investment funds and its other alternative investments have experienced, and the Company expects to continue to experience, greater
fluctuations in investment income. The Company's share of the earnings or losses from investment funds is generally reported on a one-quarter lag in order to
facilitate the timely completion of the Company's consolidated financial statements.

On February 25, 2022, the Company announced that its Board of Directors approved a 3-for-2 common stock split which was paid in the form of a
stock dividend to holders of record as of March 9, 2022. The additional shares were issued on March 23, 2022. Shares outstanding and per share amounts in
this Form 10-K reflect such 3-for-2 common stock split.

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 pretax gain of $317 million in the first quarter of 2022, before transaction expenses and the impact of foreign currency, including the reversal of the
currency translation adjustment. The gain was $251 million after such adjustments.

The COVID-19 pandemic, including the related impact on the U.S. and global economies, continued to adversely affect our results of operations. At
the same time, COVID-19 has led to reduced loss frequency in certain lines of business (which partially returned to pre-pandemic levels as many economies
and legal systems have reopened). 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, among other factors, its ongoing impact and uncertainty in connection with 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 reinsurance
premiums and other-than-temporary impairments of 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 a certain 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, 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 business. 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 business.

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

The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid loss

emergence patterns. Expected loss ratios represent management’s expectation of losses at the time the business is 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 business. Expected loss cost
inflation is particularly important for the long-tail lines, such as excess casualty, and claims with a high medical component, such as workers’ compensation.
Reported and paid loss emergence patterns are used to project current reported or paid loss amounts to their ultimate settlement value. Loss development
factors are based on the historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry data. The
paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those reserves are discounted to their estimated
present value based upon such estimated payout patterns. Management believes the estimates and assumptions it makes in the reserving process provide the
best estimate of the ultimate cost of settling claims and related expenses with respect to insured events which have occurred; however, different assumptions
and variables could lead to significantly different reserve estimates.

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 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 2022:

(In thousands)

Severity (+/-)
1%
5%
10%

116,072
349,370
640,993

Frequency (+/-)
5%

349,370
591,908
895,081

10%

640,993
895,081
1,212,690

Our net reserves for losses and loss expenses of approximately $14.2 billion as of December 31, 2022 relate to multiple accident years. Therefore, the

impact of changes in frequency or severity for more than one accident year could be higher or lower than the amounts reflected above. The impact of such
changes would likely be manifested gradually over the course of many years, as the magnitude of the changes became evident.

Approximately $3.0 billion, or 21%, of the Company’s net loss reserves as of December 31, 2022 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. In
the case of excess workers’ compensation, our policies generally attach at $1 million or higher. The claims which reach our layer therefore tend to involve the
most serious injuries and many remain open for the lifetime of the claimant, which extends the claim settlement tail. These claims also occur less frequently but
tend to be larger than primary claims, which increases claim variability. In the case of assumed reinsurance our loss reserve estimates are based, in part, upon
information received from ceding companies. If information received from ceding companies is not timely or correct, the Company’s estimate of ultimate
losses may not be accurate. Furthermore, due to

delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is also extended. Management considers the
impact of delayed reporting and the extended tail in its selection of loss development factors for these lines of business.

Information received from ceding companies is used to set initial expected loss ratios, to establish case reserves and to estimate reserves for incurred but
not reported losses on assumed reinsurance business. This information, which is generally provided through reinsurance intermediaries, is gathered through the
underwriting process and from periodic claim reports and other correspondence with ceding companies. The Company performs underwriting and claim audits
of selected ceding 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 as of December 31, 2022 and 2021:

(In thousands)
Insurance
Reinsurance & Monoline Excess
Net reserves for losses and loss expenses
Ceded reserves for losses and loss expenses
Gross reserves for losses and loss expenses

2022

2021

11,233,924
3,014,955

14,248,879
2,762,344

17,011,223

10,060,420
2,787,942

12,848,362
2,542,526

15,390,888

Following is a summary of the Company’s net reserves for losses and loss expenses by major line of business as of December 31, 2022 and 2021:

(In thousands)
December 31, 2022
Other liability
Workers’ compensation (1)
Professional liability
Commercial automobile
Short-tail lines (2)
Total Insurance
Reinsurance & Monoline Excess (1) (3)

Total

December 31, 2021
Other liability
Workers’ compensation (1)
Professional liability
Commercial automobile
Short-tail lines (2)
Total Insurance
Reinsurance & Monoline Excess (1) (3)

Total

Reported Case
Reserves

Incurred But
Not Reported

Total

1,808,700
1,023,961
501,572
629,149
403,974
4,367,356
1,551,687
5,919,043

1,724,907
1,016,014
468,680
504,821
322,917

4,037,339
1,475,623

3,826,444
899,215
1,243,604
528,398
368,907
6,866,568
1,463,268
8,329,836

3,319,665
903,448
1,019,344
424,382
356,242

6,023,081
1,312,319

5,512,962

7,335,400

5,635,144
1,923,176
1,745,176
1,157,547
772,881
11,233,924
3,014,955
14,248,879

5,044,572
1,919,462
1,488,024
929,203
679,159

10,060,420
2,787,942

12,848,362

____________________
(1) Reserves for excess and assumed workers’ compensation business are net of an aggregate net discount of $416 million and $452 million as of

December 31, 2022 and 2021, 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 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 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 each of the last three years ended

December 31, are as follows:

(In thousands)
Increase in prior year loss reserves
Increase in prior year earned premiums

Net (unfavorable) favorable prior year development

2022

2021

2020

(54,511)
18,106

(36,405)

(863)
7,510

6,647

(627)
16,807

16,180

The COVID-19 global pandemic has impacted, and may further impact, the Company’s results through its effect on claim frequency and severity.

Loss cost trends have been impacted and may be further impacted by COVID-19-related claims in certain lines of business. Losses incurred from COVID-19-
related claims have been offset, to a certain extent, by lower claim frequency in certain lines of our businesses; however, as the economy and legal systems
have reopened, the benefit of lower claim frequency has partially abated. The ultimate net impact of COVID-19 on the Company remains uncertain. New
variants of the COVID-19 virus continue to create risks with respect to loss costs and the potential for renewed impact of the other effects of COVID-19
associated with economic conditions, inflation, and social distancing and work from home rules.

Most of the COVID-19-related claims reported to the Company to date involve certain short-tailed lines of business, including contingency and event

cancellation, business interruption, and film production delay. The Company has also received COVID-19-related claims for longer-tailed casualty lines of
business such as workers’ compensation and other liability; however, the estimated incurred loss impact for these reported claims are not material at this time.
Given the continuing uncertainty regarding the pandemic's pervasiveness, the future impact that the pandemic may have on claim frequency and severity
remains uncertain at this time.

The Company has estimated the potential COVID-19 impact to its contingency and event cancellation, workers’ compensation, and other lines of
business under a number of possible scenarios; however, due to COVID-19’s continued evolving impact, there remains uncertainty around the Company’s
COVID-19 reserves. In addition, should the pandemic continue or worsen as a result of new COVID-19 variants or otherwise, governments in the jurisdictions
where we operate may impose restrictions, including lockdowns, as well as renew their efforts to expand policy coverage terms beyond the policy’s intended
coverage. Accordingly, losses arising from these actions, and the other factors described above, could exceed the Company’s reserves established for those
related policies.

As of December 31, 2022, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $341

million, of which $290 million relates to the Insurance segment and $51 million relates to the Reinsurance & Monoline Excess segment. Such $341 million of
COVID-19-related losses included $337 million of reported losses and $4 million of IBNR. For the year ended December 31, 2022, the Company recognized
current accident year losses for COVID-19-related claims activity, net of reinsurance, of approximately $5 million, of which $3 million relates to the Insurance
segment and $2 million relates to the Reinsurance & Monoline Excess segment.

Unfavorable prior year development (net of additional and return premiums) was $36 million in 2022.

Insurance – Reserves for the Insurance segment developed unfavorably by $40 million in 2022 (net of additional and return premiums). The unfavorable
development in the segment 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 unfavorable
development emerged during the third quarter as a result of settlements of claims at values higher than our expectations. However, the Company believes that
as a result of these settlements the remaining level of uncertainty around the ultimate value of its known COVID-19 claims has been significantly reduced.

The unfavorable development mentioned above also includes favorable prior year development for the Insurance segment primarily attributable to the

reported claim frequency in these lines of business during 2020 and 2021 relative to historical averages, and continued to experience lower reported incurred
losses relative to its expectations for these accident years as they developed 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 unfavorable development on the 2015 through 2019 accident years was concentrated in the general 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.

Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by $4 million in 2022 (net of

additional and return premiums). The overall favorable development for the segment was driven mainly by favorable development in excess workers
compensation, substantially offset by unfavorable development in the professional liability and non-proportional reinsurance assumed liability lines of
business. The favorable excess workers’ compensation development was spread across most prior accident years, including 2012 and prior years, and was
driven by a review of the Company’s claim reporting patterns as well as a number of favorable claim settlements relative to expectations. The unfavorable
professional liability and non-proportional reinsurance assumed liability development was concentrated mainly in accident years 2016 through 2018 and was
associated primarily with our U.S. assumed reinsurance business and related to accounts insuring construction projects and professional liability exposures.

Favorable prior year development (net of additional and return premiums) was $7 million in 2021.

Insurance – Reserves for the Insurance segment developed favorably by $20 million in 2021 (net of additional and return premiums). The overall

favorable development in 2021 was attributable to favorable development on the 2020 accident year, partially offset by adverse development on the 2016
through 2019 accident years.

The favorable development on the 2020 accident year was largely concentrated in the commercial auto liability and other liability lines of business,
including commercial multi-peril liability. During 2020 the Company achieved larger rate increases in these lines of business than were contemplated in its
budget and in its initial loss ratio selections. The Company also experienced significantly lower reported claim frequency in these lines in 2020 relative to
historical averages, and lower reported incurred losses relative to its expectations. We believe that the lower claim frequency and lower reported incurred losses
were caused by the impacts of the COVID-19 pandemic, for example, lockdowns, reduced driving and traffic, work from home, and court closures. However,
due to the uncertainty regarding the ultimate impacts of the pandemic on accident year 2020 incurred losses, the Company elected not to react to these lower
reported trends during 2020. As more information became available and the 2020 accident year continued to mature, during 2021 the Company started to
recognize favorable accident year 2020 development in response to the continuing favorable reported loss experience relative to its expectations.

The adverse development on the 2016 through 2019 accident years is concentrated largely in the other liability line of business, including commercial

multi-peril liability, but is also seen to a lesser extent in commercial auto liability. The adverse development for these accident years is driven by a higher than
expected number of large losses reported, and particularly impacted the directors and officers liability, lawyers professional liability, and excess and surplus
lines casualty classes of business. We also believe that increased social inflation is contributing to the increased number of large losses, for example, higher
jury awards on cases which go to trial, and the corresponding higher demands from plaintiffs and higher values required to reach settlement on cases which do
not go to trial.

Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed unfavorably by $13 million in 2021. The
unfavorable development in the segment was driven by the non-proportional reinsurance assumed liability and other liability lines of business, related primarily
to accident years 2017 through 2019, and was partially offset by favorable development in excess workers’ compensation business which was spread across
many prior accident years. The unfavorable non-proportional reinsurance assumed liability and other liability development was associated with our U.S. and
U.K. assumed reinsurance business, and related primarily to accounts insuring construction projects and professional liability exposures.

Favorable prior year development (net of additional and return premiums) was $16 million in 2020.

Insurance - Reserves for the Insurance segment developed favorably by $24 million in 2020 (net of additional and return premiums). Continuing the

pattern seen in recent years, the overall favorable development in 2020 resulted from more significant favorable development on workers’ compensation
business, which was partially offset by unfavorable development on professional liability, including excess professional liability

For workers’ compensation, the favorable development was spread across almost all prior accident years, including prior to 2011, but was most

significant in accident years 2016 through 2019. The favorable workers’ compensation development reflects a continuation of the benign loss cost trends
experienced during recent years, particularly the favorable claim frequency trends (i.e., number of reported claims per unit of exposure). The long term trend of
declining workers’ compensation frequency can be attributable to improved workplace safety. Loss severity trends were also aided by our continued investment
in claims handling initiatives such as medical case management services and vendor savings through usage of preferred provider networks and pharmacy
benefit managers. Reported workers’ compensation losses in 2020 continued to be below our expectations at most of our businesses, and were below the
assumptions underlying our initial loss ratio picks and our previous reserve estimates for most prior accident years.

For professional liability business, unfavorable development was driven mainly by large losses reported in the directors and officers (“D&O”), lawyers

professional and excess hospital professional liability lines of business. For these lines of business, we continue to see an increase in the number of large losses
reported and a lengthening of the reporting “tail” beyond historical levels. We believe a contributing cause is rising social inflation in the form of, for example,
higher jury awards on cases that go to trial, and the corresponding higher demands from plaintiffs and higher values required to reach settlement on cases that
do not go to trial. The unfavorable development for professional liability affected mainly accident years 2016 through 2018.

Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed unfavorably by $8 million in 2020. The
unfavorable development in the segment was driven by non-proportional assumed liability business written in both the U.S. and U.K., and was partially offset
by favorable development on excess workers’ compensation business. The unfavorable non-proportional assumed liability development was concentrated in
accident years 2014 through 2018, and related primarily to accounts insuring construction projects and professional liability exposures.

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves

that were discounted was $1,267 million and $1,387 million at December 31, 2022 and 2021, respectively. The aggregate net discount for those reserves, after
reflecting the effects of ceded reinsurance, was $416 million and $452 million at December 31, 2022 and 2021, respectively. At December 31, 2022, discount
rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.4%.

Substantially all discounted workers’ compensation reserves (97% of total discounted reserves at December 31, 2022) are 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 December 31, 2022), including reserves for quota share reinsurance and reserves related to losses regarding occupational lung disease.
These reserves are discounted at statutory rates prescribed or 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 $60 million at both December 31, 2022 and 2021.
The assumed premium estimates are based upon terms set forth in reinsurance agreements, information received from ceding companies during the
underwriting and negotiation of agreements, reports received from ceding companies and discussions and correspondence with reinsurance intermediaries. The
Company also considers its own view of market conditions, economic trends and experience with similar lines of business. These premium estimates represent
management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements.

Allowance for Expected Credit Losses on Investments.

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

The Company’s credit assessment of allowance for expected credit losses uses a third party model for available for sale and held to maturity securities, as
well as loans receivable. The allowance for expected credit losses is generally based on the performance of the underlying collateral under various economic
and default scenarios that involve subjective judgments and estimates by management. Modeling these securities involves various factors, such as projected
default rates, the nature and realizable value of the collateral, if any, the ability of the issuer to make scheduled payments, historical performance and other
relevant economic and performance factors. A discounted cash flow analysis is used to ascertain the amount of the allowance for expected credit losses, if
any. In general, the model reverts to the rating-level long-term average marginal default rates based on 10 years of historical data, beyond the forecast period.
For other inputs, the model in most cases reverts to the baseline long-term assumptions linearly over 5 years beyond the forecast period. The long-term
assumptions are based on the historical averages.

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

A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at December 31, 2022 is

presented in the table below.

($ in thousands)
Foreign government
Corporate
State and municipal
Mortgage-backed securities
Asset-backed securities

Total

Number of
Securities

Aggregate
Fair Value

Unrealized
Loss

36
10
1
14
1
62

119,332
39,347
12,247
4,464
16
175,406

73,900
4,649
2,756
269
10
81,584

As of December 31, 2022, the Company has recorded an allowance for expected credit losses on fixed maturity securities of $37 million. The
Company has evaluated the remaining fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary
market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on
its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due.

Loans Receivable – For loans receivable, the Company estimates an allowance for expected credit losses based on relevant information about past

events, including historical loss experience, current conditions and forecasts that affect the expected collectability of the amortized cost of the financial asset.
The allowance for expected credit losses is presented as a reduction to amortized cost of the financial asset in the consolidated balance sheet and changes to the
estimate for expected credit losses are recognized through net investment gains (losses). Loans receivable are reported net of an allowance for expected credit
losses of $2 million as of both December 31, 2022 and 2021.

Fair Value Measurements. The Company’s fixed maturity available for sale securities, equity securities, and its 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 December 31, 2022:

(In thousands)
Pricing source:
Independent pricing services
Syndicate manager
Directly by the Company based on:

Observable data
Total

Carrying
Value

Percent
of Total

17,025,723
62,966

447,364
17,536,053

97.1 %
0.4

2.5
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 December 31, 2022, 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 Years Ended December 31, 2022 and 2021

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 years ended December 31, 2022 and 2021. 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)
Insurance

Gross premiums written
Net premiums written
Net premiums earned
Loss ratio
Expense ratio
GAAP combined ratio

Reinsurance & Monoline Excess

Gross premiums written
Net premiums written
Net premiums earned
Loss ratio
Expense ratio
GAAP combined ratio
Consolidated
Gross premiums written
Net premiums written
Net premiums earned
Loss ratio
Expense ratio
GAAP combined ratio

2022

2021

10,583,785
8,784,146
8,369,062

61.3 %
27.9
89.2

1,325,267
1,219,924
1,192,367

61.3 %
28.4
89.7

11,909,052
10,004,070
9,561,429

61.3 %
28.0
89.3

9,471,667
7,743,814
7,077,708

61.1 %
28.3
89.4

1,228,467
1,119,053
1,028,323

61.0 %
29.7
90.7

10,700,134
8,862,867
8,106,031

61.1 %
28.5
89.6

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 years ended December 31, 2022 and 2021.

(In thousands, except per share data)
Net income to common stockholders
Weighted average diluted shares
Net income per diluted share

2022

2021

1,381,062
279,461
4.94

1,022,490
279,749
3.66

The Company reported net income of $1,381 million in 2022 compared to $1,022 million in 2021. The $359 million increase in net income was

primarily due to an after-tax increase in underwriting income of $145 million mainly due to the growth in premium rates and exposure as well as reductions in
expense ratio driven by net earned premium growth outpacing expense growth, an after-tax increase in net investment gains of $90 million primarily due to the
sale of a real estate investment in London as well as change in market value of equity securities, an after-tax increase in net investment income of $87 million
primarily due to rising interest rates and a larger investment portfolio related to fixed maturity securities, an after-tax increase in foreign currency gains of $20
million, an after-tax reduction in interest expenses of $14 million due to debt repayment and refinancings, an after-tax reduction on debt extinguishment
expense of $9 million for debt redeemed in 2021, an after-tax increase in profit from insurance service businesses of $5 million, an after-tax increase of $5
million in minority interest and a reduction of $2 million in tax expense due to a change in the effective tax rate, partially offset by an after-tax increase in
corporate expenses of $17 million mainly due to performance-based compensation costs and an after-tax decrease in profits from non-insurance businesses of
$1 million. The number of weighted average diluted shares decreased by 0.3 million for 2022 compared to 2021 mainly reflecting shares repurchased in 2021
and 2022.

Premiums. Gross premiums written were $11,909 million in 2022, an increase of 11% from $10,700 million in 2021. The increase was due to the

growth in the Insurance segment of $1,112 million and $97 million in the Reinsurance & Monoline

Excess segment. Approximately 82% of premiums expiring were renewed in both 2022 and 2021.

Average renewal premium rates for insurance and facultative reinsurance increased 6.4% in 2022 and 9.1% in 2021, when adjusted for changes in

exposures. Average renewal premium rates for insurance and facultative reinsurance excluding workers' compensation increased 7.5% in 2022 and 10.4% in
2021, when adjusted for changes in exposures.

•

A summary of gross premiums written in 2022 compared with 2021 by line of business within each business segment follows:

Insurance gross premiums increased 12% to $10,584 million in 2022 from $9,472 million in 2021. Gross premiums increased $539 million (16%)
for other liability, $354 million (17%) for short-tail lines, $143 million (12%) for commercial auto, $70 million (6%) for workers' compensation and
$6 million (0.4%) for professional liability.

Reinsurance & Monoline Excess gross premiums increased 8% to $1,325 million in 2022 from $1,228 million in 2021. Gross premiums written
increased $58 million (8%) for casualty lines, $28 million (12%) for property lines and $11 million (5%) for monoline excess.

Net premiums written were $10,004 million in 2022, an increase of 13% from $8,863 million in 2021. Ceded reinsurance premiums as a percentage of

gross written premiums were 16% in 2022 and 17% in 2021.

Premiums earned increased 18% to $9,561 million in 2022 from $8,106 million in 2021. 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 2022 are
related to business written during both 2022 and 2021. Audit premiums were $312 million in 2022 compared with $195 million in 2021.

Net Investment Income. Following is a summary of net investment income for the years ended December 31, 2022 and 2021:

(In thousands)
Fixed maturity securities, including cash and cash equivalents and loans receivable
Investment funds
Equity securities
Arbitrage trading account
Real estate

Gross investment income
Investment expenses
Total

Amount

Average Annualized
Yield

2022

2021

2022

2021

549,281
145,099
52,600
45,213
(3,087)
789,106
(9,921)
779,185

382,001
220,014
32,020
37,676
7,703
679,414
(7,796)
671,618

2.9 %
8.9
4.9
4.0
(0.2)
3.2
—
3.2 %

2.2 %

15.8
5.0
5.3
0.4
3.1
—
3.0 %

Net investment income increased 16% to $779 million in 2022 from $672 million in 2021 due primarily to an $167 million increase in income from
fixed maturity securities mainly driven by rising interest rates and a larger investment portfolio, a $21 million increase from equity securities and a $7 million
increase from the arbitrage trading account, partially offset by a $75 million decrease in income from investment funds primarily due to financial service funds,
an $11 million decrease in real estate and a $2 million increase in investment expenses. Investment funds are reported on a one quarter lag. The average
annualized yield for fixed maturity securities was 2.9% in 2022 and 2.2% in 2021. The effective duration of the fixed maturity portfolio was 2.4 years at both
December 31, 2022 and 2021. 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. Average invested assets, at
cost (including cash and cash equivalents), were $24.4 billion in 2022 and $22.2 billion in 2021.

Insurance Service Fees. The Company earns fees from an insurance distribution business, a third-party administrator, and as a servicing carrier of

workers' compensation assigned risk plans for certain states. Insurance service fees increased to $111 million in 2022 from $94 million in 2021 due to organic
growth within the business.

Net Realized and Unrealized Gains on Investments. The Company buys and sells securities and other investment assets on a regular basis in order to

maximize its total return on investments. Decisions to sell securities and other investment assets are based on management’s view of the underlying
fundamentals of specific investments as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic
conditions. Net realized and unrealized gains on investments were $217 million in 2022 compared with $107 million in 2021. In 2022, the gains reflected net
realized gains on investments of $218 million (primarily due to a $251 million net gain from sale of a real estate investment in London after

transaction expenses and the foreign currency impact including reversal of the currency translation adjustment), partially offset by a change in unrealized losses
on equity securities of $1 million. In 2021, the gains reflected net realized gains on investments of $145 million (primarily due to the sale of certain real estate
assets and the disposition of an investment fund), partially offset by an increase in unrealized losses on equity securities of $38 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. For the year ended December 31, 2022, the pre-tax change in allowance for
expected credit losses on investments increased by $15 million ($12 million after-tax), which is reflected in net investment gains, primarily due to change in
estimate. For the year ended December 31, 2021, the pre-tax change in allowance for expected credit losses on investments increased by $16 million ($13
million after-tax), which is reflected in net investment gains, primarily related to foreign government securities which did not previously have an allowance.

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 $510 million in 2022 and $489 million in 2021. The increase mainly relates to the business
recovery from COVID-19 on promotional merchandise and textile business as well as a newly acquired commercial and residential textile business in 2022,
partially offset by a decrease for the aviation-related business.

Losses and Loss Expenses. Losses and loss expenses increased to $5,862 million in 2022 from $4,954 million in 2021. The consolidated loss ratio was

61.3% in 2022 and 61.1% in 2021. Catastrophe losses, net of reinsurance recoveries, were $212 million (including current accident year losses of
approximately $5 million related to COVID-19) in 2022 compared with $202 million in 2021 (including losses of approximately $58 million related to
COVID-19). Adverse prior year reserve development (net of premium offsets) was $36 million in 2022 and favorable prior year reserve development was $7
million in 2021 (refer to Note 14 of our consolidated financial statements for more detail). The loss ratio excluding catastrophe losses and prior year reserve
development was 58.7% in both 2022 and 2021.

A summary of loss ratios in 2022 compared with 2021 by business segment follows:

•

Insurance - The loss ratio of 61.3% in 2022 was 0.2 points higher than the loss ratio of 61.1% in 2021. Catastrophe losses were $127 million in 2022
compared with $150 million in 2021. The Company reflected a best estimate (net of reinsurance) based upon available information for current
accident year COVID-19-related losses of approximately $3 million. Adverse prior year reserve development was $40 million in 2022, driven by
two businesses that wrote policies providing coverage for event cancellation, and film production delay which were heavily impacted by losses
directly caused by the COVID-19 pandemic and favorable prior year reserve development was $20 million in 2021. The loss ratio excluding
catastrophe losses and prior year reserve development was 59.3% in both 2022 and 2021.

Reinsurance & Monoline Excess - The loss ratio of 61.3% in 2022 was 0.3 points higher than the loss ratio of 61.0% in 2021. Catastrophe losses
were $85 million in 2022 compared with $52 million in 2021.The Company reflected a best estimate (net of reinsurance) based upon available
information for current accident year COVID-19-related losses of approximately $2 million. Favorable prior year reserve development was $4
million in 2022, and adverse prior year reserve development was $13 million in 2021. The loss ratio excluding catastrophe losses and prior year
reserve development decreased 0.2 points to 54.5% in 2022 from 54.7% in 2021.

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

(In thousands)
Policy acquisition and insurance operating expenses
Insurance service expenses
Net foreign currency gains
Debt extinguishment costs
Other costs and expenses

Total

2022

2021

2,673,903
96,419
(50,930)
—
242,113

2,961,505

2,306,727
86,003
(25,725)
11,521
220,744

2,599,270

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 16% from 2021, while net premiums earned increased 18% over
that period. The expense ratio (underwriting expenses expressed as a percentage of net premiums earned) was 28.0% in 2022, down from 28.5% in 2021. The
improvement is primarily attributable to higher net premiums earned outpacing compensation expense growth. However, to the extent our net premiums earned
decrease or travel and entertainment expenses increase, our expense ratio would be expected to increase.

Service expenses, which represent the costs associated with the fee-based businesses, was $96 million in 2022 and $86 million in 2021 due to the

organic growth within the business.

Net foreign currency gains result from transactions denominated in a currency other than a businesses’ functional currency. Net foreign currency gains

was $51 million in 2022 and $26 million in 2021, mainly related to the strengthening of the U.S. dollar compared to the majority of other currencies.

Debt extinguishment costs of $12 million in 2021 related to the redemption of $400 million of subordinated debentures in March and June 2021 that

were due in 2056.

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 $242 million in 2022 from $221
million in 2021, primarily due to the increase in performance-based compensation costs in 2022.

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 $493 million in 2022
compared to $472 million in 2021. The increase mainly relates to the business recovery from COVID-19 on promotional merchandise and textile business as
well as a newly acquired residential and commercial textile business in 2022, partially offset by a decrease for the aviation-related business.

Interest Expense. Interest expense was $130 million in 2022 and $147 million in 2021. In March 2021, the Company issued $400 million aggregate
principal amount of 3.55% senior notes due 2052 and redeemed its $110 million aggregate principal amount of 5.90% subordinated debentures due 2056. In
June 2021, the Company redeemed the $290 million aggregate principal amount of its 5.75% subordinated debentures due 2056. In September 2021, the
Company issued $350 million aggregate principal amount of 3.15% senior notes due 2061.

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 above redemptions during the year ended December 31, 2021 resulted in debt
extinguishment costs of $12 million. Additionally, in the second quarter of 2021, the Company sold a real estate asset, which resulted in a $102 million
reduction of the Company's non-recourse debt that was supporting the property.

The repayment at maturity and redemption of senior notes and debentures and issuance of additional senior notes and debentures in 2022 and 2021

decreased interest expense in 2022.

Income Taxes. The effective income tax rate was 19.5% in 2022 and 19.6% in 2021. The lower effective income tax rate for 2022 was primarily due to

a net reduction in the Company’s valuation allowance against foreign tax credits and foreign net operating losses. The effective income tax rate reflects tax
benefits attributable to tax-exempt investment income and equity-based compensation in both periods. See Note 17 of the Consolidated Financial Statements
for a reconciliation of the income tax expense and the amounts computed by applying the Federal income tax rate of 21%.

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $169 million of its non-U.S. subsidiaries

since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. In the future, if such earnings were distributed the Company
projects that the incremental tax, if any, will be immaterial.

On August 16, 2022, the Inflation Reduction Act of 2022 was enacted. Among other things, the legislation introduced a corporate alternative minimum

tax on certain corporations. The tax is applicable for taxable years beginning after December 31, 2022 and imposes a 15% minimum tax on a corporation’s
applicable financial statement income. We are continuing to evaluate the overall impact of this tax legislation on our operations and U.S. federal income tax
position at this time.

Results of Operations for the Years Ended December 31, 2021 and 2020

For a comparison of the Company’s results of operations for the year ended December 31, 2021 to the year ended December 31, 2020, see Item 7,

Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2021, which was filed with the Securities and Exchange Commission on February 24, 2022.

Investments

As part of its investment strategy, the Company establishes a level of cash and highly liquid short-term and intermediate-term securities that, combined

with expected cash flow, it believes is adequate to meet its payment obligations. In addition to fixed-maturity securities, the Company invests in equity
securities, merger arbitrage securities, investment funds, private equity, loans and real estate related assets. The Company's investments in investment funds and
its other alternative investments have experienced, and the Company expects to continue to experience, greater fluctuations in investment income.

The Company also attempts to maintain an appropriate relationship between the effective duration of the investment portfolio and the approximate

duration of its liabilities (i.e., policy claims and debt obligations). The effective duration of the investment portfolio was 2.4 years at both December 31, 2022
and 2021, respectively. The Company’s investment portfolio and investment-related assets as of December 31, 2022 were as follows:

($ in thousands)
Fixed maturity securities:

U.S. government and government agencies
State and municipal:
Special revenue
Local general obligation
State general obligation
Corporate backed
Pre-refunded (1)

Total state and municipal

Mortgage-backed securities:

Agency
Commercial
Residential-Prime
Residential-Alt A

Total mortgage-backed securities

Asset-backed securities
Corporate:

Industrial
Financial
Utilities
Other

Total corporate

Foreign government

Total fixed maturity securities

Equity securities available for sale:

Common stocks
Preferred stocks

Total equity securities available for sale

Investment funds
Cash and cash equivalents
Real estate
Arbitrage trading account
Loans receivable

Total investments

Carrying
Value

Percent
of Total

892,258

3.7 %

1,721,497
441,097
416,713
199,639
158,840

2,937,786

901,332
528,609
235,315
3,762

1,669,018
3,982,773

3,252,999
2,470,372
551,048
429,573

6,703,992
1,401,522

17,587,349

982,751
203,143

1,185,894

1,608,548
1,449,346
1,340,622
944,230
193,002

7.1
1.8
1.7
0.8
0.6

12.0

3.7
2.2
1.0
—

6.9
16.4

13.4
10.2
2.3
1.7

27.6
5.8

72.4

4.0
0.8

4.8

6.6
6.0
5.5
3.9
0.8

24,308,991

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.

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; however, there is no reason to expect these gains to continue in future
periods.

Equity Securities. Equity securities primarily represent investments in common and preferred stocks in companies with potential growth opportunities in

different sectors, mainly in the financial institutions and energy sectors.

Investment Funds. At December 31, 2022, the carrying value of investment funds was $1,609 million, including investments in financial services funds

of $466 million, other funds of $370 million (which includes a deferred compensation trust asset of $30 million), transportation funds of $337 million, real
estate funds of $205 million, energy funds of $116 million, and infrastructure funds of $115 million. Investment funds are primarily reported on a one-quarter
lag.

Real Estate. Real estate is directly owned property held for investment. At December 31, 2022, real estate properties in operation included a long-term
ground lease in Washington D.C., an office complex in New York City and the completed portion of a mixed-use project in Washington D.C. In addition, part
of the previously mentioned mixed-use project in Washington D.C. is under development. The Company expects to fund further development costs for the
project with a combination of its own funds and external financing. 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, net of allowance for expected credit losses, had an amortized cost of $193 million and an aggregate fair value of

$188 million at December 31, 2022. The amortized cost of loans receivable is net of an allowance for expected credit losses of $2 million as of December 31,
2022. Loans receivable include real estate loans of $174 million that are secured by commercial and residential real estate located primarily in London and
New York. Real estate loans generally earn interest at fixed or stepped interest rates and have maturities through 2026. Loans receivable include commercial
loans of $19 million that are secured by business assets and have fixed interest rates with varying maturities not exceeding 10 years.

Liquidity and Capital Resources

Cash Flow. Cash flow provided from operating activities increased to $2,569 million in 2022 from $2,184 million in 2021, primarily due to an increase

in premium receipts partially offset by increased loss and loss expense 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 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
maturity 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 76% invested in cash, cash
equivalents and marketable fixed maturity securities as of December 31, 2022. 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 December 31, 2022, the Company had senior notes, subordinated debentures and other debt outstanding with a carrying value of $2,837
million and a face amount of $2,862 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 $5 million
in 2024, $2 million in 2025, $250 million in 2037, $350 million in 2044, $470 million in 2050, $400 million in 2052, $185 million in 2058, $300 million in
2059, $250 million in 2060, and $650 million in 2061.

On April 1, 2022, the Company entered into a senior unsecured revolving credit facility that provides for revolving, unsecured borrowings up to an
aggregate of $300 million with a $50 million sublimit for letters of credit. The Company may increase the amount available under the facility to a maximum of
$500 million subject to obtaining lender commitments for the increase and other customary conditions. Borrowings under the facility may be used for working
capital and other general corporate purposes. All borrowings under the facility must be repaid by April 1, 2027, except that letters of credit outstanding on that
date may remain outstanding until April 1, 2028 (or such later date approved by all lenders). Our ability to utilize the facility is conditioned on the satisfaction
of representations, warranties and covenants that are customary for facilities of this type. As of December 31, 2022, there were no borrowings outstanding
under the facility.

Equity. At December 31, 2022, total common stockholders’ equity was $6.7 billion, common shares outstanding were 264,546,100 and stockholders’

equity per outstanding share was $25.51. The Company repurchased 1,370,394 and 1,752,619 shares of its common stock in 2022 and 2021, respectively. The
aggregate cost of the repurchases was $94 million in 2022 and $122 million in 2021. In 2022, the Board declared regular quarterly cash dividends of $0.09 per
share in the first quarter, and $0.10 per share in each of the remaining three quarters, as well as special dividends of $0.50 per share in the second quarter, for a
total of $235 million in aggregate dividends in 2022.

Total Capital. Total capitalization (equity, debt and subordinated debentures) was $9.6 billion at December 31, 2022. The percentage of the Company’s

capital attributable to senior notes, subordinated debentures and other debt was 30% and 33% at December 31, 2022 and 2021, respectively.

Federal and Foreign Income Taxes

The Company files a consolidated income tax return in the U.S. and foreign tax returns in each of the countries in which it has overseas operations. At

December 31, 2022, the Company had a gross deferred tax asset of $801 million (which primarily relates to unrealized losses on investments, loss and loss
expense reserves and unearned premium reserves). The Company also has a $47 million valuation allowance against the gross deferred tax asset and a gross
deferred tax liability of $425 million (which primarily relates to deferred policy acquisition costs, and various investment funds) resulting in a net deferred tax
asset of $329 million. The realization of this asset is dependent upon the Company's ability to generate sufficient taxable income in future periods. Based on
historical results and the prospects for future operations, management anticipates that it is more likely than not that future taxable income will be sufficient for
the realization of this asset.

Reinsurance

The Company follows customary industry practice of reinsuring a portion of its exposures in exchange for paying reinsurers a part of the premiums
received on the policies it writes. Reinsurance is purchased by the Company principally to reduce its net liability on individual risks and to protect against
catastrophic losses. Although reinsurance does not legally discharge an insurer from its primary liability for the full amount of the policies, it does make the
assuming reinsurer liable to the insurer to the extent of the reinsurance coverage. The Company monitors the financial condition of its reinsurers and attempts
to place its coverages only with financially sound carriers. Reinsurance coverage and retentions vary depending on the line of business, location of the risk and
nature of loss. The Company’s reinsurance purchases include the following:

•

•
•

Property reinsurance treaties - The Company purchases property reinsurance to reduce its exposure to large individual property losses and
catastrophe events. Following is a summary of significant property reinsurance treaties in effect as of January 1, 2023: The Company’s property per
risk reinsurance generally covers losses between $2.5 million and $80 million. The Company’s catastrophe excess of loss reinsurance program
provides protection for net losses in excess of between $65 million and $80 million up to $500 million for the majority of U.S. business written by
its Insurance segment businesses and U.S. and non-U.S. business written by Lloyd's Syndicate, excluding offshore energy; this includes some co-
participation in lower layers. For terrorism, we currently retain the first $95 million and then fully insure above this to our desired limit of $400
million. For 2023, some of our property cat reinsurance is placed via an industry loss warranty (ILW) cover and the equivalent W. R. Berkley limit
and retention (and resulting net position) are estimated based on our market share and modeled outcome when applying the ILW layering. The
Company’s catastrophe reinsurance agreements are subject to certain limits, exclusions and reinstatement premiums.
Casualty reinsurance treaties - The Company purchases casualty reinsurance to reduce its exposure to large individual casualty losses, workers’
compensation catastrophe losses and casualty losses involving multiple claimants or insureds for the majority of business written by its U.S.
companies. A significant casualty treaty (casualty catastrophe) in effect as of January 1, 2023 provides significant protection for losses between $10
million and $60 million from single events with claims involving two or more insurable interests or for systemic events involving multiple insureds
and/or policy years. The treaty also covers casualty contingency losses in excess of $5 million and up to $100 million. For losses involving two or
more claimants for primary workers’ compensation business, coverage is generally in place for losses between $10 million and $500 million. For
excess workers’ compensation business, such coverage is generally in place for losses between $25 million and $500 million. Our workers’
compensation catastrophe reinsurance program is a shared cover for both excess and primary workers’ compensation business.
Facultative reinsurance - The Company also purchases facultative reinsurance on certain individual policies or risks that are in excess of treaty
reinsurance capacity.
Other reinsurance - Depending on the business, the Company purchases specific additional reinsurance to supplement the above programs.
Effective January 1, 2023, Lifson Re will continue to be a participant on the majority of the Company’s reinsurance placements for a 30.0% share of
the placed amounts. This pertains to all traditional treaty reinsurance/retrocessional placements for both property and casualty business where there
is more than one open market reinsurer participating. Lifson Re has been capitalized with $380 million of equity from a small group of sophisticated
global investors with long-term investment horizons, including a minority participation by the Company. Lifson Re will participate on a fully
collateralized basis.

The Company places a number of its casualty treaties on a “risk attaching” basis. Under risk attaching treaties, all claims from policies incepting during
the period of the reinsurance contract are covered even if they occur after the expiration date of the reinsurance contract. If the Company is unable to renew or
replace its existing reinsurance coverage, protection for unexpired policies would remain in place until their expiration. In such case, the Company could revise
its underwriting strategy for new business to reflect the absence of reinsurance protection. The casualty catastrophe treaty highlighted above was purchased on
a losses discovered basis. Property catastrophe and workers’ compensation catastrophe reinsurance is generally placed on a “losses occurring basis,” whereby
only claims occurring during the period are covered. If the Company is unable to renew or replace these reinsurance coverages, unexpired policies would not
be protected, though we frequently have the option to purchase run-off coverage in our treaties.

Following is a summary of earned premiums and loss and loss expenses ceded to reinsurers for each of the three years ended December 31, 2022:

(In thousands)
Earned premiums
Losses and loss expenses

Year Ended December 31,

2022

2021

1,883,263
1,269,338

1,805,341
1,236,960

2020

1,499,948
955,630

Ceded earned premiums increased 4.3% in 2022 to $1,883 million. The ceded losses and loss expenses ratio decreased 2 points to 67% in 2022 from

69% in 2021.

The following table presents the credit quality of amounts due from reinsurers as of December 31, 2022.

(In thousands)
Reinsurer

Amounts due in excess of $20 million:

Lloyd’s of London
Berkshire Hathaway
Munich Re
Partner Re
Hannover Re Group
Swiss Re
Renaissance Re
Everest Re
Liberty Mutual
Axis Capital
Korean Re
Fairfax Financial
Axa Insurance
Arch Capital Group
Sompo Holdings Group
Helvetia Holdings Group
Markel Corp Group
Validus Holdings Group
TOA Re

Other reinsurers:
Rated A- or better
Secured (2)
All Others
Subtotal
Residual market pools (3)
Allowance for expected credit losses

Total

_________________

Rating

(1)

Amount

A+
AA+
AA-
A+
AA-
AA-
A+
A+
A
A+
A
A-
AA-
A+
A+
A+
A
A
A+

347,927
332,034
306,530
275,410
191,264
189,591
163,973
155,847
96,402
81,538
59,884
55,228
46,058
45,663
36,157
30,823
30,216
24,548
22,945

163,198
332,502
27,299

3,015,037
180,757
(8,064)
3,187,730

(1) S&P rating, or if not rated by S&P, A.M. Best rating.

(2) Secured by letters of credit or other forms of collateral.

(3) Many states require licensed insurers that provide workers' compensation insurance to participate in programs that provide workers' compensation to

employers that cannot procure coverage from an insurer on a voluntary basis. Insurers can fulfill this residual market obligation by participating in pools
where results are shared by the participating companies. The Company acts as a servicing carrier for workers' compensation pools in certain states. As a
servicing carrier, the Company writes residual market business directly and then cedes 100% of this business to the respective pool. As a servicing carrier,
the Company receives fee income for its services. The Company does not retain underwriting risk, and credit risk is limited as ceded balances are jointly
shared by all the pool members.

Contractual Obligations

Following is a summary of the Company's contractual obligations as of December 31, 2022:

(In thousands)
Estimated Payments By Periods
Gross reserves for losses
Operating lease obligations
Purchase obligations
Subordinated debentures
Senior notes and other debt
Interest payments
Other long-term liabilities

Total

2023

2024

2025

2026

2027

Thereafter

4,586,303
47,024
148,593
—
—
125,580
2,489
4,909,989

3,268,257
41,788
51,602
—
5,300
125,580
2,228
3,494,755

2,461,737
32,928
51,456
—
1,954
125,580
2,035
2,675,690

1,788,739
25,973
53,819
—
—
125,580
1,859
1,995,970

1,439,989
16,472
52,821
—
—
125,580
1,698
1,636,560

3,895,626
68,912
55,395
1,035,000
1,820,000
3,154,164
20,232
10,049,329

The estimated payments for reserves for losses and loss expenses in the above table represent the projected (undiscounted) payments for gross loss and

loss expense reserves related to losses incurred as of December 31, 2022. The estimated payments in the above table do not consider payments for losses to be
incurred in future periods. These amounts include reserves for reported losses and reserves for incurred but not reported losses. Estimated amounts recoverable
from reinsurers are not reflected. The estimated payments by year are based on historical loss payment patterns.The actual payments may differ from the
estimated amounts due to changes in ultimate loss reserves and in the timing of the settlement of those reserves. In addition, at December 31, 2022, the
Company had commitments to invest up to $402 million and $146 million in certain investment funds and real estate construction projects, respectively. These
amounts are not included in the above table.

The Company utilizes letters of credit to back certain reinsurance payments and obligations. Outstanding letters of credit were $5 million as of

December 31, 2022. The Company has made certain guarantees to state regulators that the statutory capital of certain subsidiaries will be maintained above
certain minimum levels.

Off-Balance Sheet Arrangements

An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a

company has (1) made guarantees, (2) a retained or contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity
or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to
the Company, or that engages in leasing, hedging or research and development arrangements with the Company. The Company has no arrangements of these
types that management believes may have a material current or future effect on our financial condition, liquidity or results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk. The fair value of the Company’s investments is subject to risks of fluctuations in credit quality and interest rates. The Company uses
various models and stress test scenarios to monitor and manage interest rate risk. The Company attempts to manage its interest rate risk by maintaining an
appropriate relationship between the effective duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt
obligations). The effective duration for the fixed maturity portfolio (including cash and cash equivalents) was 2.4 years at both December 31, 2022 and 2021.

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.

The following table outlines the groups of fixed maturity securities and their effective duration at December 31, 2022:

($ in thousands)
Mortgage-backed securities
State and municipal
U.S. government and government agencies
Corporate
Foreign government
Loans receivable
Asset-backed securities
Cash and cash equivalents

Total

Effective
Duration
(Years)
4.5
3.3
3.1
2.7
2.2
1.3
0.9
0.0

2.4

Fair Value

1,669,056
2,942,025
892,258
6,703,992
1,401,522
187,981
3,982,773
1,449,346

19,228,953

Duration is a common measure of the price sensitivity of fixed maturity securities to changes in interest rates. The Company determines the estimated

change in fair value of the fixed maturity securities, assuming parallel shifts in the yield curve for treasury securities while keeping spreads between individual
securities and treasury securities static. The estimated fair value at specified levels at December 31, 2022 would be as follows:

(In thousands)

Change in interest rates:
300 basis point rise
200 basis point rise
100 basis point rise
Base scenario
100 basis point decline
200 basis point decline
300 basis point decline

Estimated Fair Value Change in Fair Value

17,931,180
18,344,941
18,778,053
19,228,952
19,692,291
20,161,330
20,632,243

(1,297,772)
(884,011)
(450,899)
—
463,339
932,378
1,403,291

Arbitrage investing differs from other types of investments in that its focus is 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 believes that this makes arbitrage investments less vulnerable to changes in
general stock market conditions. Potential changes in market conditions are also mitigated by the implementation of hedging strategies, including short sales.

Additionally, the arbitrage positions are generally hedged against market declines by purchasing put options, selling call options or entering into swap
contracts. The Company's merger arbitrage securities are primarily exposed to the risk of completion of announced deals, which are subject to regulatory as
well as transactional and other risks.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors
W. R. Berkley Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of W. R. Berkley Corporation and subsidiaries (the Company) as of December 31, 2022 and
2021, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three‑year period
ended December 31, 2022, and the related notes and financial statement schedules II to VI (collectively, the consolidated financial statements). In our opinion,
the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the
results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S. generally accepted
accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal
control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 24, 2023 expressed an unqualified opinion on the
effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing
procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated
or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements
and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Reserves for losses and loss expenses

As discussed in Notes 1 and 14 to the consolidated financial statements, the Company estimates the reserves for losses and loss expenses (reserves) using
a variety of actuarial techniques and methods. The key assumptions used to arrive at the best estimate of recorded reserves are expected loss ratios, rate of
loss cost inflation, reported and paid loss emergence patterns, loss frequency and severity, and the loss reporting lag. Such amounts are adjusted for
certain qualitative factors. The reserves as of December 31, 2022 were $17.0 billion.

We identified the assessment of the estimate of reserves as a critical audit matter because it involved significant measurement uncertainty, which required
complex auditor judgement. Specialized actuarial skills and knowledge were required to evaluate the actuarial method or methods and assumptions used.
Assumptions included loss development

factors; the weighting of actuarial methods when more than one was used; the impact of qualitative factors; and whether payments are fixed and reliably
determinable for certain reserves subject to discounting.

The following are the primary procedures we performed to address the critical audit matter. We evaluated the design and tested the operating effectiveness
of certain internal controls over the Company’s reserving process. This included controls over the Company’s process to develop the Company’s best
estimate of reserves based on actuarial methodologies and assumptions employed by the Company’s actuaries. We involved actuarial professionals with
specialized skills and knowledge, who assisted in:

•
•
•
•

•
•

examining the Company’s actuarial methodologies for compliance with Actuarial Standards of Practice;
evaluating the Company’s ability to discount certain reserves by comparing the expected payout pattern of claims paid to actual claims paid;
evaluating the Company’s actuarial point estimate by performing independent actuarial analyses for certain of the larger, more complex businesses;
evaluating the Company’s actuarial point estimate by examining the Company actuaries’ process, and key assumptions for certain of the remaining
businesses;
developing an independent range of reserves based on actuarial methodologies and assumptions and comparing to the Company’s recorded reserves;
evaluating the Company’s recorded reserves and year-over-year movements of the Company’s reserves relative to, and within, the independently
developed range of reserves.

We have served as the Company’s auditor since 1972.

New York, New York
February 24, 2023

/S/ KPMG LLP

W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)
REVENUES:

Net premiums written
Change in net unearned premiums

Net premiums earned
Net investment income
Net investment gains:

Net realized and unrealized gains on investments
Change in allowance for expected credit losses on investments

Net investment gains
Revenues from non-insurance businesses
Insurance service fees
Other income

Total revenues

OPERATING COSTS AND EXPENSES:

Losses and loss expenses
Other operating costs and expenses
Expenses from non-insurance businesses
Interest expense

Total operating costs and expenses
Income before income taxes

Income tax expense

Net income before noncontrolling interests

Noncontrolling interests

Net income to common stockholders

NET INCOME PER SHARE:

Basic

Diluted

See accompanying notes to consolidated financial statements.

Year Ended December 31,

2022

2021

2020

10,004,070
(442,641)

9,561,429

779,185

217,311
(14,914)
202,397

509,548
110,544
3,396
11,166,499

5,861,750
2,961,505
493,189
130,374

9,446,818
1,719,681
(334,727)
1,384,954
(3,892)
1,381,062

4.99
4.94

$
$

8,862,867
(756,836)

8,106,031

671,618

106,958
(16,326)
90,632

489,151
93,857
4,177
9,455,466

4,953,960
2,599,270
472,151
147,180

8,172,561
1,282,905
(251,890)
1,031,015
(8,525)
1,022,490

3.69
3.66

$
$

7,262,437
(331,594)

6,930,843

583,821

73,514
29,486
103,000

389,888
88,777
2,596
8,098,925

4,468,706
2,390,392
384,488
150,537

7,394,123
704,802
(171,817)
532,985
(2,315)
530,670

1.89
1.87

W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)
Net income before noncontrolling interests
Other comprehensive (loss) gain.:

Change in unrealized translation adjustments
Change in unrealized investment (losses) gains, net of taxes

Other comprehensive (loss) gain
Comprehensive income

Noncontrolling interests

Comprehensive income to common stockholders

See accompanying notes to consolidated financial statements.

2022

Year Ended December 31,
2021

2020

1,384,954

1,031,015

532,985

1,179
(983,803)
(982,624)
402,330
(3,890)
398,440

(20,969)
(198,812)
(219,781)
811,234
(8,523)
802,711

29,927
140,250
170,177
703,162
(2,313)
700,849

W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)
Assets
Investments:

Fixed maturity securities (amortized cost of $18,715,483 and $16,471,304; allowance for expected credit losses of $37,466 and $22,625
at December 31, 2022 and 2021)
Investment funds
Real estate
Arbitrage trading account
Equity securities
Loans receivable (net of allowance for expected credit losses of $1,791 and $1,718 at December 31, 2022 and 2021)

Total investments
Cash and cash equivalents
Premiums and fees receivable (net of allowance for expected credit losses of $30,660 and $25,218 at December 31, 2022 and 2021)
Due from reinsurers (net of allowance for expected credit losses of $8,064 and $7,713 at December 31, 2022 and 2021)
Deferred policy acquisition costs
Prepaid reinsurance premiums
Trading account receivable from brokers and clearing organizations
Property, furniture and equipment
Goodwill
Accrued investment income
Current federal and foreign income taxes
Deferred federal and foreign income taxes
Other assets

Total assets

Liabilities and Equity
Liabilities:

Reserves for losses and loss expenses
Unearned premiums
Due to reinsurers
Trading account securities sold but not yet purchased
Trading account payable to brokers and clearing organizations
Current federal and foreign income taxes
Deferred federal and foreign income taxes
Senior notes and other debt
Subordinated debentures
Other liabilities

Total liabilities
Equity:

Preferred stock, par value $.10 per share:

Authorized 5,000,000 shares; issued and outstanding — none

Common stock, par value $.20 per share:

Authorized 1,250,000,000 shares and 750,000,000 shares, respectively, issued and outstanding, net of treasury shares, 264,546,100
and 265,170,882 shares, respectively

Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Treasury stock, at cost, 264,468,528 and 263,843,868 shares, respectively

Total common stockholders’ equity

Noncontrolling interests

Total equity

Total liabilities and equity

See accompanying notes to consolidated financial statements.

December 31,

2022

2021

17,587,349
1,608,548
1,340,622
944,230
1,185,894
193,002
22,859,645

1,449,346
2,779,244
3,187,730
763,486
696,468
233,863
423,232
185,509
166,784
39,123
340,647
736,022
33,861,099

17,011,223
5,297,654
523,131
—
—
34,350
11,646
1,828,823
1,008,371
1,377,740

27,092,938

16,602,673
1,480,612
1,852,508
1,179,606
941,243
115,172
22,171,814

1,568,843
2,522,972
2,923,026
676,145
676,915
—
419,883
169,652
122,938
23,570
57,425
753,231
32,086,414

15,390,888
4,847,160
514,980
1,169
53,636
21,068
17,470
2,259,416
1,007,652
1,305,245

25,418,684

—

105,803
997,534
10,161,005
(1,264,581)
(3,251,429)

6,748,332
19,829

6,768,161

105,803
981,104
9,015,135
(281,955)
(3,167,076)

6,653,011
14,719

6,667,730

33,861,099

32,086,414

W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except per share data)

COMMON STOCK:

Beginning and end of period

ADDITIONAL PAID IN CAPITAL:

Beginning of period
Restricted stock units issued
Restricted stock units expensed
Change in controlling financial interest of a subsidiary
End of period

RETAINED EARNINGS:

Beginning of period
Cumulative effect adjustment resulting from changes in accounting principles
Net income to common stockholders
Dividends ($0.89, $1.34, and $0.31 per share, respectively)

End of period

ACCUMULATED OTHER COMPREHENSIVE LOSS:

Unrealized investment (losses) gains:

Beginning of period
Cumulative effect adjustment resulting from changes in accounting principles
Change in unrealized (losses) gains on securities without an allowance for expected
credit losses
Change in unrealized (losses) gains on securities with an allowance for expected credit losses

End of period

Currency translation adjustments:

Beginning of period
Net change in period
End of period

Total accumulated other comprehensive loss

TREASURY STOCK:
Beginning of period
Stock exercised/vested
Stock issued
Stock repurchased

End of period

NONCONTROLLING INTERESTS:

Beginning of period
Contributions (distributions)
Net income
Other comprehensive loss, net of tax

End of period

See accompanying notes to consolidated financial statements.

2022

Year Ended December 31,
2021

2020

105,803 $

105,803

981,104 $
(32,622)
49,052
—
997,534 $

977,215 $
(44,041)
47,930
—
981,104 $

9,015,135 $

8,348,381 $

—
1,381,062
(235,192)

—
1,022,490
(355,736)

10,161,005 $

9,015,135 $

90,900 $
—

289,714 $
—

(955,435)
(28,370)
(892,905)

(208,938)
10,124
90,900

(372,855)
1,179
(371,676)
(1,264,581) $

(3,167,076) $
9,428
359
(94,140)

(351,886)
(20,969)
(372,855)
(281,955) $

(3,058,425) $
13,264
511
(122,426)

(3,251,429) $

(3,167,076) $

14,719 $
1,220
3,892
(2)
19,829 $

14,995 $
(8,799)
8,525
(2)
14,719 $

1,020,774
(38,491)
48,567
(53,635)
977,215

7,932,372
(30,514)
530,670
(84,147)

8,348,381

124,514
24,952

108,244
32,004
289,714

(381,813)
29,927
(351,886)
(62,172)

(2,726,711)
13,917
726
(346,357)

(3,058,425)

43,403
(30,721)
2,315
(2)
14,995

W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
CASH FROM OPERATING ACTIVITIES:

Net income to common stockholders
Adjustments to reconcile net income to net cash from operating activities:
Net investment gains
Depreciation and amortization
Noncontrolling interests
Investment funds
Stock incentive plans
Change in:

Arbitrage trading account
Premiums and fees receivable
Reinsurance accounts
Deferred policy acquisition costs
Current income taxes
Deferred income taxes
Reserves for losses and loss expenses
Unearned premiums
Other

Net cash from operating activities
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:

Proceeds from sale of fixed maturity securities
Proceeds from sale of equity securities
Distributions from (contributions to) investment funds
Proceeds from maturities and prepayments of fixed maturity securities
Purchase of fixed maturity securities
Purchase of equity securities
Real estate (purchased) sold
Change in loans receivable
Net additions to property, furniture and equipment
Change in balances due from security brokers
Cash received in connection with business disposition
Payment for business purchased, net of cash acquired

Net cash (used in) from investing activities
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:

Net (payments) proceeds from issuance of debt
Repayment of senior notes and other debt
Cash dividends to common stockholders
Purchase of common treasury shares
Other, net

Net cash (used in) from financing activities

Net impact on cash due to change in foreign exchange rates
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

See accompanying notes to consolidated financial statements.

Year Ended December 31,

2022

2021

2020

1,381,062

1,022,490

530,670

(202,397)
55,872
3,892
(145,099)
49,411

(53,291)
(268,171)
(266,307)
(88,844)
(3,534)
(64,712)
1,684,254
466,590
19,878

2,568,604

797,948
82,319
24,623
4,891,179
(8,036,680)
(340,482)
(45,920)
(83,212)
(52,684)
14,337
906,789
(49,572)

(1,891,355)

(3,309)
(426,503)
(235,192)
(94,140)
(12,848)

(771,992)
(24,754)

(119,497)
1,568,843

(90,632)
129,682
8,525
(220,015)
46,680

(268,649)
(364,395)
(433,644)
(121,663)
(43,890)
7,630
1,635,774
786,627
89,467

2,183,987

1,842,139
126,980
101,050
6,067,230
(10,716,748)
(464,645)
166,886
(27,421)
(66,634)
(17,983)
—
—

(2,989,146)

1,034,107
(504,952)
(355,736)
(122,426)
(45,162)

5,831
(4,195)

(803,523)
2,372,366

1,449,346

1,568,843

(103,000)
135,065
2,315
(54,253)
49,658

(67,943)
(173,618)
(313,525)
(38,691)
49,021
(34,057)
1,176,049
415,956
43,039

1,616,686

3,832,555
114,763
(3,042)
3,864,327
(7,551,591)
(253,031)
178,934
1,467
(38,171)
(26,515)
—
—

119,696

741,637
(652,751)
(84,147)
(346,357)
(56,225)

(397,843)
10,117

1,348,656
1,023,710

2,372,366

W. R. BERKLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2022, 2021 and 2020

(1) Summary of Significant Accounting Policies

(A) Principles of consolidation and basis of presentation

The 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"). All significant intercompany transactions and balances have been eliminated.
Reclassifications have been made in the 2021 and 2020 financial statements as originally reported to conform to the presentation of the 2022 financial
statements. Shares outstanding and per share amounts have been adjusted to reflect the 3-for-2 common stock split effected on March 23, 2022. In the fourth
quarter of 2022, the Company adjusted 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 which resulted in no impact on the total amount of investing activities. For
the years ended December 31, 2021 and 2020, the Company did not correct these line items 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. The most significant items on our balance sheet that involve a greater degree of accounting estimates that are subject to
change in the future are the valuation of investments, allowance for expected credit losses on investments, reserves for losses and loss expenses and premium
estimates. Actual results could differ from those estimates.

(B) Revenue recognition

Insurance premiums are recognized as written at the inception of the policy. Reinsurance premiums are estimated based upon information received

from ceding companies, and subsequent differences from such estimates are recorded in the period they are determined. Insurance and reinsurance premiums
are primarily earned on a pro rata basis over the policy term. Fees for services are earned over the period that the services are provided. Premiums and fees
receivable are reported net of an allowance for expected credit losses, with the allowance being estimated based on current and future expected conditions,
historical loss data and specific identification of collectability concerns where applicable. Changes in the allowance are reported within other operating costs
and expenses.

Audit premiums are recognized when they are reliably determinable. The change in accruals for earned but unbilled audit premiums increased

(decreased) net premiums written and premiums earned by $25 million, $10 million and $(27) million in 2022, 2021 and 2020, respectively.

Revenues from non-insurance businesses are derived from businesses engaged in the distribution of promotional merchandise, world-wide textile

solutions, and aircraft services provided to the general, commercial and military aviation markets. These aircraft services include (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. Revenue is recognized upon the shipment of products and parts, the delivery of aircraft, the delivery of fuel, and over the completion period of
services.

Insurance service fee revenue represents servicing fees for program administration and claims management services provided by the Company,

including workers' compensation assigned risk plans, as well as insurance brokerage and risk management services. Fees for program administration, claims
management and risk management services are primarily recognized ratably over the related contract period for which the underlying services are rendered.
Commissions for insurance brokerage are generally recognized when the underlying insurance policy is effective.

Cash equivalents consist of funds invested in money market accounts and investments with an effective maturity of three months or less when

purchased.

(D) Investments

Fixed maturity securities classified as available for sale are carried at estimated fair value, with unrealized gains and losses, net of applicable income

taxes, excluded from earnings and reported as a component of comprehensive income and a separate component of stockholders' equity. Fixed maturity
securities that the Company has the positive intent and ability to

hold to maturity are classified as held to maturity and reported at amortized cost. Investment income from fixed maturity securities is recognized based on the
constant effective yield method. Premiums and discounts on mortgage-backed securities are adjusted for the effects of actual and anticipated prepayments on a
retrospective basis.

Equity securities with readily determinable fair values are measured at fair value, with changes in the fair value recognized in net income within net

realized and unrealized gains on investments.

Fixed maturity securities that the Company purchased with the intent to sell in the near-term are classified as trading account securities and are

reported at estimated fair value. Realized and unrealized gains and losses from trading activity are reported as net investment income and are recorded at the
trade date. Short sales and short call options are presented as trading securities sold but not yet purchased. Unsettled trades and the net margin balances held by
the clearing broker are presented as a trading account receivable from brokers and clearing organizations.

Investment funds are carried under the equity method of accounting. The Company's share of the earnings or losses of investment funds is primarily

reported on a one-quarter lag in order to facilitate the timely completion of the Company's consolidated financial statements.

Loans receivable primarily represent commercial real estate mortgage loans and bank loans and are carried at amortized cost. The accrual of interest

on loans receivable is discontinued if the loan is 90 days past due based on the contractual terms of the loan unless the loan is adequately secured and in
process of collection. In general, loans are placed on non-accrual status or charged off at an earlier date if collection of principal or interest is considered
doubtful. Interest on these loans is accounted for on a cash basis until qualifying for return to accrual status. Loans are returned to accrual status when all
principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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.” Fair value of investments is determined based on a fair value hierarchy that prioritizes the use of observable inputs over
the use of unobservable inputs and requires the use of observable inputs when available. (See Note 13 of the Notes to Consolidated Financial Statements.)

Realized gains or losses represent the difference between the cost of securities sold and the proceeds realized upon sale and are recorded at the trade

date. The Company uses primarily the first-in, first-out method to determine the cost of securities sold.

For available for sale securities in an unrealized loss position where the Company intends to sell, or it is more likely than not that it will be required to
sell the security before recovery in value, the amortized cost basis is written down to fair value through net investment gains. For available for sale securities in
an unrealized loss position where the Company does not intend to sell, or it is more likely than not that it will not be required to sell the security before
recovery in value, the Company evaluates whether the decline in fair value has resulted from credit losses or all other factors (non-credit factors). In making
this assessment, the Company considers the extent to which fair value is less than amortized cost, changes to the rating of the security by a rating agency, and
adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows
expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is
less than the amortized cost basis, an allowance for expected credit losses is recorded for the credit loss through net investment gains, 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. The impairment related to non-credit factors is recognized in comprehensive income (loss).

For financial assets carried at amortized cost, which includes held to maturity securities and loans receivable, the Company estimates an allowance for

expected credit losses based on relevant information about past events, including historical loss experience, current conditions and forecasts that affect the
expected collectability of the amortized cost of the financial asset. The allowance for expected credit losses is presented as a reduction to amortized cost of the
financial asset in the consolidated balance sheet and changes to the estimate for expected credit losses are recognized through net investment gains.

The Company’s credit assessment of allowance for expected credit losses uses a third party model for available for sale and held to maturity securities,
as well as loans receivable. The allowance for expected credit losses is generally based on the performance of the underlying collateral under various economic
and default scenarios that involve subjective judgments and estimates by management. Modeling these securities involves various factors, such as projected
default rates, the nature and realizable value of the collateral, if any, the ability of the issuer to make scheduled payments, historical performance and other
relevant economic and performance factors. A discounted cash flow analysis is used to ascertain the amount of the allowance for expected credit losses, if any.
In general, the model reverts to the rating-level long-term average marginal default rates based on 10 years of historical data, beyond the forecast period. For
other inputs, the model in most cases reverts to the baseline long-

term assumptions linearly over 5 years beyond the forecast period. The long-term assumptions are based on the historical averages.

The Company reports accrued investment income separately from fixed maturity securities, and has elected not to measure an allowance for expected

credit losses for accrued investment income. Accrued investment income is written off through net investment income at the time the issuer of the bond defaults
or is expected to default on payments.

Real estate held for investment purposes is initially recorded at the purchase price, which is generally fair value, and is subsequently reported at cost

less accumulated depreciation. Real estate taxes, interest and other costs incurred during development and construction are capitalized. Buildings are
depreciated on a straight-line basis over the estimated useful lives of the building. Minimum rental income is recognized on a straight-line basis over the lease
term. Income and expenses from real estate are reported as net investment income. The carrying value of real estate is reviewed for impairment and an
impairment loss is recognized if the estimated undiscounted cash flows from the use and disposition of the property are less than the carrying value of the
property.

(E) 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 weighted

average number of common shares outstanding during the year (including 11,416,856 common shares held in a grantor trust). 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 year 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.

(F) Deferred policy acquisition costs

Acquisition costs associated with the successful acquisition of new and renewed insurance and reinsurance contracts are deferred and amortized

ratably over the terms of the related contracts. Ceding commissions received on reinsurance contracts are netted against acquisition costs and are recognized
ratably over the life of the contract. Deferred policy acquisition costs are presented net of unearned ceding commissions. Deferred policy acquisition costs are
comprised primarily of commissions, as well as employment-related underwriting costs and premium taxes. Deferred policy acquisition costs are reviewed to
determine if they are recoverable from future income and, if not, are charged to expense. The recoverability of deferred policy acquisition costs is evaluated
separately by each of our operating companies. Future investment income is taken into account in measuring the recoverability of deferred policy acquisition
costs.

(G) Reserves for losses and loss expenses

Reserves for losses and loss expenses are an accumulation of amounts determined on the basis of (1) evaluation of claims for business written directly
by the Company; (2) estimates received from other companies for reinsurance assumed by the Company; and (3) estimates for losses incurred but not reported
(based on Company and industry experience). These estimates are periodically reviewed and, as experience develops and new information becomes known, the
reserves are adjusted as necessary. Such adjustments are reflected in the statements of income in the period in which they are determined. The Company
discounts its reserves for excess and assumed workers' compensation claims using a risk-free or statutory rate. (See Note 14 of Notes to Consolidated Financial
Statements.)

(H) Reinsurance ceded

The unearned portion of premiums ceded to reinsurers is reported as prepaid reinsurance premiums and earned ratably over the policy term. The

estimated amounts of reinsurance recoverable on unpaid losses are reported as due from reinsurers. To the extent any reinsurer does not meet its obligations
under reinsurance agreements, the Company must discharge its liability. Amounts due from reinsurers are reflected net of funds held where the right of offset is
present. The Company has provided an allowance for expected credit losses for estimated uncollectible reinsurance. The allowance is estimated based on the
composition of the recoverable balance, considering reinsurer credit ratings, collateral received from financial institutions and funds withheld arrangements,
length of collection periods, probability of default methodology, and specific identification of collectability concerns. Changes in the allowance are reported
within losses and loss expenses.

(I) Deposit accounting

Contracts that do not meet the risk transfer requirements of GAAP are accounted for using the deposit accounting method. Under this method, an asset

or liability is recognized at the inception of the contract based on consideration paid or received. The amount of the deposit asset or liability is adjusted at
subsequent reporting dates using the interest method with a corresponding credit or charge to interest income or expense. Deposit liabilities for assumed
reinsurance contracts were $33 million and $35 million at December 31, 2022 and 2021, respectively.

(J) Federal and foreign income taxes

The Company files a consolidated income tax return in the U.S. and foreign tax returns in countries where it has overseas operations. The Company's

method of accounting for income taxes is the asset and liability method. Under this method, deferred tax assets and liabilities are measured using tax rates
currently in effect or expected to apply in the years in which those temporary differences are expected to reverse. Interest and penalties, if any, are reported as
income tax expense. The Company believes there are no tax positions that would require disclosure under GAAP. Deferred tax assets are reduced by a
valuation allowance if it is more likely than not that all or a portion of the deferred tax assets will not be realized.

(K) Foreign currency

Gains and losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity's functional currency) are
reported on the statements of income as other operating costs and expenses. Unrealized gains or losses resulting from translating the results of non-U.S. dollar
denominated operations are reported in accumulated other comprehensive income. Revenues and expenses denominated in currencies other than U.S. dollars
are generally translated at the weighted average exchange rate during the year. Assets and liabilities are translated at the rate of exchange in effect at the balance
sheet date.

(L) Property, furniture and equipment

Property, furniture and equipment are carried at cost less accumulated depreciation. Depreciation is calculated using the estimated useful lives of the

respective assets. Depreciation expense was $52 million, $52 million and $53 million for 2022, 2021 and 2020, respectively.

(M) Comprehensive income

Comprehensive income encompasses all changes in stockholders' equity (except those arising from transactions with stockholders) and includes net

income, net unrealized holding gains or losses on available for sale securities and unrealized foreign currency translation adjustments.

(N) Goodwill and other intangible assets

Goodwill and other intangible assets are tested for impairment on an annual basis and at interim periods where circumstances require. The Company's

impairment test as of December 31, 2022 indicated that there were no material impairment losses related to goodwill and other intangible assets. Intangible
assets of $102 million and $85 million are included in other assets as of December 31, 2022 and 2021, respectively.

(O) Restricted stock units

The costs resulting from all share-based payment transactions with employees are recognized in the consolidated financial statements using a fair-

value-based measurement method. Compensation cost is recognized for financial reporting purposes over the period in which the employee is required to
provide service in exchange for the award (generally the vesting period).

(P) Statements of cash flows

Interest payments were $138 million, $141 million and $155 million in 2022, 2021 and 2020, respectively. Income taxes paid were $295 million, $244

million and $103 million in 2022, 2021 and 2020, respectively. Other non-cash items include unrealized investment gains and losses. (See Note 11 of Notes to
Consolidated Financial Statements.)

(Q) Recent accounting pronouncements

Recently adopted accounting pronouncements:

All accounting and reporting standards that became effective in 2022 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:

All recently issued but not yet effective accounting and reporting standards are either not applicable to the Company or are not expected to have a

material impact on the Company.

(2) Acquisitions

In March 2022, the Company acquired an 80.0% ownership interest for $51.1 million in a company engaged in residential and commercial textiles.

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 2022:

(In thousands)

Cash and cash equivalents
Real estate, furniture and equipment
Intangible assets
Goodwill
Other assets

Total assets acquired

Other liabilities assumed
Noncontrolling interest
Net assets acquired

2022

1,564
6,000
25,600
15,857
20,349
69,370

(12,420)
(5,814)
51,136

(3) Consolidated Statements of Comprehensive (Loss) Income

The following tables present the components of the changes in accumulated other comprehensive (loss) income as of and for the years ended

December 31, 2022 and 2021:

(In thousands)

December 31, 2022
Changes in AOCI
Beginning of period
Other comprehensive (loss) income before reclassifications
Amounts reclassified from AOCI
Other comprehensive (loss) income
Unrealized investment loss related to noncontrolling interest

Ending balance
Amounts reclassified from AOCI
Pre-tax
Tax effect

After-tax amounts reclassified
Other comprehensive (loss) income
Pre-tax
Tax effect

Other comprehensive (loss) income

(In thousands)

December 31, 2021
Changes in AOCI
Beginning of period
Other comprehensive loss before reclassifications
Amounts reclassified from AOCI
Other comprehensive loss
Unrealized investment loss related to non-controlling interest

Ending balance
Amounts reclassified from AOCI
Pre-tax
Tax effect

After-tax amounts reclassified
Other comprehensive loss
Pre-tax
Tax effect

Other comprehensive loss

_______________
(1) Net investment gains in the consolidated statements of income.
(2) Income tax expense in the consolidated statements of income.

Unrealized Investment
(Losses) Gains

Currency Translation
Adjustments

Accumulated Other
Comprehensive Loss

(372,855)
1,179
—

1,179
—

(371,676)

—
—
—

1,179
—

1,179

Currency Translation
Adjustments

(351,886)
(20,969)
—
(20,969)
—

(372,855)

—
—
—

(20,969)
—

(20,969)

(281,955)
(1,053,659)
71,035

(982,624)
(2)

(1,264,581)

89,918
(18,883)
71,035

(1,246,949)
264,325

(982,624)

Accumulated Other
Comprehensive Loss

(62,172)
(243,328)
23,547
(219,781)
(2)

(281,955)

29,806
(6,259)
23,547

(275,908)
56,127

(219,781)

90,900
(1,054,838)
71,035

(983,803)
(2)

(892,905)

89,918
(18,883)
71,035

(1)

(2)

(1,248,128)
264,325

(983,803)

Unrealized Investment
Gains (Losses)

289,714
(222,359)
23,547
(198,812)
(2)

90,900

29,806
(6,259)
23,547

(1)

(2)

(254,939)
56,127

(198,812)

(4) Investments in Fixed Maturity Securities

At December 31, 2022 and 2021, investments in fixed maturity securities were as follows:

(In thousands)
December 31, 2022
Held to maturity:

State and municipal
Residential mortgage-backed

Total held to maturity

Available for sale:

U.S. government and government agency
State and municipal:
Special revenue
State general obligation
Pre-refunded
Corporate backed
Local general obligation
Total state and municipal

Mortgage-backed securities:

Residential
Commercial

Total mortgage-backed securities

Asset-backed securities

Corporate:
Industrial
Financial
Utilities
Other

Total corporate

Foreign government

Total available for sale
Total investments in fixed maturity securities

Amortized
Cost

Allowance for
Expected Credit
Losses (1)

Gross Unrealized

Gains

Losses

Fair
Value

Carrying
Value

47,802
3,608
51,410

(114) $
—
(114)

4,239
38
4,277

—
—
—

51,927
3,646
55,573

47,688
3,608
51,296

937

(69,158)

892,258

960,479

1,837,309
387,709
156,106
210,228
454,983
3,046,335

1,308,019
547,757
1,855,776

4,132,365

3,491,645
2,585,247
586,066
441,230

7,104,188

1,564,930
18,664,073

—

—
—
—
—
—
—

(18)
—
(18)

—

(1,704)
(2,997)
—
—

(4,701)

(32,633)
(37,352)

3,662
2,651
2,741
334
2,967
12,355

395
215
610

2,730

4,439
5,505
1,307
—

11,251

4,283
32,166

(119,474)
(21,335)
(7)
(10,923)
(16,853)
(168,592)

(171,595)
(19,363)
(190,958)

(152,322)

(241,381)
(117,383)
(36,325)
(11,657)

(406,746)

(135,058)
(1,122,834)

1,721,497
369,025
158,840
199,639
441,097
2,890,098

1,136,801
528,609
1,665,410

3,982,773

3,252,999
2,470,372
551,048
429,573

6,703,992

1,401,522
17,536,053

1,721,497
369,025
158,840
199,639
441,097
2,890,098

1,136,801
528,609
1,665,410

3,982,773

3,252,999
2,470,372
551,048
429,573

6,703,992

1,401,522
17,536,053

17,587,349

18,715,483

(37,466) $

36,443

(1,122,834)

17,591,626

(In thousands)
December 31, 2021
Held to maturity:

State and municipal
Residential mortgage-backed

Total held to maturity

Available for sale:

U.S. government and government agency
State and municipal:
Special revenue
State general obligation
Pre-refunded
Corporate backed
Local general obligation
Total state and municipal

Mortgage-backed securities:

Residential
Commercial

Total mortgage-backed securities

Asset-backed securities

Corporate:
Industrial
Financial
Utilities
Other

Total corporate

Foreign government

Total available for sale
Total investments in fixed maturity securities

Amortized
Cost

Allowance for
Expected Credit
Losses (1)

Gross Unrealized

Gains

Losses

Fair
Value

Carrying
Value

69,539 $
4,829
74,368

(387)
—
(387)

10,813
632
11,445

—
—
—

79,965
5,461
85,426

69,152
4,829
73,981

8,509

(4,294)

855,343

851,128

2,016,382
388,110
202,633
166,943
401,974

3,176,042

940,744
125,709
1,066,453

4,504,950

3,231,520
1,739,282
396,242
154,210

5,521,254

1,277,109
16,396,936

—

—
—
—
—
—

—

—
—
—

—

(16)
—
—
—

(16)

(22,222)
(22,238)

62,961
23,152
14,891
7,191
29,455

137,650

9,896
3,388
13,284

4,409

62,751
30,709
13,262
125

106,847

7,508
278,207

(5,706)
(1,015)
(574)
(1,532)
(732)

(9,559)

(11,321)
(341)
(11,662)

(18,794)

(21,092)
(6,591)
(3,202)
(1,525)

(32,410)

(47,494)
(124,213)

2,073,637
410,247
216,950
172,602
430,697

3,304,133

939,319
128,756
1,068,075

4,490,565

3,273,163
1,763,400
406,302
152,810

5,595,675

1,214,901
16,528,692

2,073,637
410,247
216,950
172,602
430,697

3,304,133

939,319
128,756
1,068,075

4,490,565

3,273,163
1,763,400
406,302
152,810

5,595,675

1,214,901
16,528,692

16,602,673

16,471,304 $

(22,625)

289,652

(124,213)

16,614,118

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

The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the years ended

December 31, 2022 and 2021:

(In thousands)
Allowance for expected credit losses, beginning of period
Change in allowance for expected credit losses
Allowance for expected credit losses, end of period

State and Municipal

2022

2021

387 $
(273)
114 $

798
(411)
387

The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the years ended

December 31, 2022 and 2021:

(In thousands)
Allowance for expected credit losses, beginning of
period
Expected credit losses on securities for which credit
losses were not previously recorded
Expected credit losses (gains) on securities for which
credit losses were previously recorded
Reduction due to disposals
Allowance for expected credit losses, end of period

Foreign
Government

Corporate

Mortgage-
Backed

Total

Foreign
Government

Corporate

Total

2022

2021

22,222 $

16 $

— $

22,238 $

1,264 $

518 $

1,782

1,910

2,648

4,579

19,072

19,088

8,534
(33)
32,633 $

2,042
(5)
4,701 $

(3)
—
18 $

10,573
(38)
37,352 $

2,438
(552)
22,222 $

(513)
(5)
16 $

1,925
(557)
22,238

During the year ended December 31, 2022, the Company increased the allowance for expected credit losses for available for sale securities utilizing its

credit loss assessment process and inputs used in its credit loss model due to an increase in unrealized losses primarily associated with foreign government
securities. During the year ended December 31, 2021, the Company increased the allowance for expected credit losses primarily due to foreign government
securities that had no reserve in prior periods.

The amortized cost and fair value of fixed maturity securities at December 31, 2022, 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)
Due in one year or less
Due after one year through five years
Due after five years through ten years
Due after ten years
Mortgage-backed securities

Total

Amortized
Cost (1)

Fair Value

1,570,480
8,746,271
4,395,236
2,143,998
1,859,384

1,527,090
8,299,945
4,119,772
1,975,763
1,669,056

18,715,369

17,591,626

________________
(1) Amortized cost is reduced by the allowance for expected credit losses of $114 thousand related to held to maturity securities.

At December 31, 2022 and 2021, there were no investments, other than investments in United States government and government agency securities,

which exceeded 10% of common stockholders’ equity. At December 31, 2022, investments with a carrying value of $1,910 million were on deposit in custodial
or trust accounts, of which $1,218 million was on deposit with insurance regulators, $656 million was on deposit in support of the Company’s underwriting
activities at Lloyd’s, $31 million was on deposit as security for reinsurance clients and $5 million was on deposit as security for letters of credit issued in
support of the Company’s reinsurance operations.

(5) Investments in Equity Securities

At December 31, 2022 and 2021, investments in equity securities were as follows:

(In thousands)
December 31, 2022
Common stocks
Preferred stocks

Total

December 31, 2021
Common stocks
Preferred stocks

Total

Cost

Gains

Losses

Gross Unrealized

Fair
Value

Carrying
Value

855,987
259,341

1,115,328

619,896
250,149
870,045

192,165
1,053

193,218

92,401
7,874
100,275

(65,401)
(57,251)

(122,652)

(16,894)
(12,183)
(29,077)

982,751
203,143

1,185,894

695,403
245,840
941,243

982,751
203,143

1,185,894

695,403
245,840
941,243

(6) Arbitrage Trading Account

At December 31, 2022 and 2021, the fair value and carrying value of the arbitrage trading account were $944 million and $1,180 million, respectively.

The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which
are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus on transactions and events believed
likely to bring about a change in value over a relatively short time period (usually four months or less).

The Company uses put options and call options in order to mitigate the impact of potential changes in market conditions on the merger arbitrage
trading account. These options are reported at fair value. As of December 31, 2022, the fair value of short option contracts outstanding was $0.1 thousand
(notional amount of $10 thousand). Other than with respect to the use of these trading account securities, the Company does not make use of derivatives.

(7) Net Investment Income

Net investment income consists of the following:

(In thousands)
Investment income (loss) earned on:

Fixed maturity securities, including cash and cash equivalents and loans receivable
Investment funds
Arbitrage trading account
Real estate

Equity securities

Gross investment income

Investment expense

Net investment income

2022

2021

2020

549,281
145,099
45,213

(3,087)

52,600

789,106
(9,921)

382,001
220,014
37,676

7,703

32,020

679,414
(7,796)

779,185

671,618

426,563
54,253
77,931

24,027

10,172

592,946
(9,125)

583,821

(8) Investment Funds

The Company evaluates whether it is an investor in a variable interest entity ("VIE"). Such entities do not have sufficient equity at risk to finance

their activities without additional subordinated financial support, or the equity investors, as a group, do not have the characteristics of a controlling financial
interest (primary beneficiary). The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative
assessment of the VIE's capital structure, contractual terms, nature of the VIE's operations and purpose, and the Company's relative exposure to the related risks
of the VIE on the date it becomes initially involved in the VIE and on an ongoing basis. The Company is not the primary beneficiary in any of its investment
funds, and accordingly, carries its interests in investments 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 of $402 million as of December 31, 2022.

Investment funds consist of the following:

(In thousands)
Financial services
Transportation
Real estate
Energy
Infrastructure
Other funds

Total

Carrying Value
as of December 31,

Income (Loss) From Investment Funds For the Year Ended

2022

2021

2022

2021

2020

465,683
336,753
204,644
116,432
115,428
369,608

431,818
336,688
273,690
150,224
12,314
275,878

34,030
53,180
48,723
1,425
4,603
3,138

98,893
42,424
29,484
22,118
1,372
25,723

1,608,548

1,480,612

145,099

220,014

34,763
(616)
7,543
(11,039)
1,672
21,930

54,253

The Company's share of the earnings or losses of investment funds is primarily reported on a one-quarter lag in order to facilitate the timely

completion of the Company's consolidated financial statements.

Financial services investment funds include the Company’s minority investment in Lifson Re, a Bermuda reinsurance company. Effective January 1,
2021, Lifson Re participated on a fully collateralized basis in a majority of the Company’s reinsurance placements for a 22.5% share of placed amounts. The
percentage increased from 22.5% to 30.0% effective July 1, 2022. This pertains to all traditional reinsurance/retrocessional placements for both property and
casualty business where there is more than one open market reinsurer participating. For the years ended December 31, 2022 and 2021, the Company ceded
approximately $399 million and $245 million, respectively, of written premiums to Lifson Re.

Other funds include deferred compensation trust assets of $30 million and $34 million in 2022 and 2021, 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.

(9) Real Estate

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

(In thousands)

Properties in operation

Properties under development

Total

As of December 31,

2022

1,114,167

226,455

1,340,622

2021

1,626,826

225,682

1,852,508

In 2022, properties in operation included a long-term ground lease in Washington, D.C., an office complex in New York City and the completed

portion of a mixed-use project in Washington D.C. Properties in operation are net of accumulated depreciation and amortization of $33,206,000 and
$57,391,000 as of December 31, 2022 and 2021, respectively. Related

depreciation expense was $12,269,000 and $19,688,000 for the years ended December 31, 2022 and 2021, respectively. Future minimum rental income
expected on operating leases relating to properties in operation is $32,282,796 in 2023, $33,528,105 in 2024, $31,015,149 in 2025, $29,250,535 in 2026,
$28,334,384 in 2027 and $510,771,307 thereafter.

During the first quarter of 2022, the Company sold a real estate investment in London (proceeds from the real estate and related 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 2022 and 2021, with the completed portion as noted above reported in

properties in operation as of December 31, 2022.

(10) Loans Receivable

At December 31, 2022 and 2021, loans receivable were as follows:

(In thousands)
Amortized cost (net of allowance for expected credit losses):

Real estate loans
Commercial loans

Total

Fair value:

Real estate loans
Commercial loans

Total

As of December 31,

2022

2021

173,616 $
19,386
193,002 $

168,595 $
19,386
187,981 $

89,431
25,741
115,172

90,793
25,741
116,534

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 was none and $0.2 million as of December 31, 2022 and 2021, respectively.

The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the years ended December 31, 2022

and 2021:

(In thousands)
Allowance for expected credit losses, beginning of period
Change in allowance for expected credit losses
Allowance for expected credit losses, end of period

Real Estate
Loans

2022
Commercial
Loans

Total

Real Estate
Loans

2021
Commercial
Loans

1,362 $
(262)
1,100 $

356
335
691

1,718 $
73
1,791 $

1,683 $
(321)
1,362 $

3,754 $
(3,398)

356 $

Total

5,437
(3,719)
1,718

The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan

structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions.

In evaluating the real estate loans, the Company considers their credit quality indicators, including loan to value ratios, which compare the outstanding

loan amount to the estimated value of the property, the borrower’s financial condition and performance with respect to loan terms, the position in the capital
structure, the overall leverage in the capital structure and other market conditions.

(11) Net Investment Gains

Net investment gains were as follows:

(In thousands)
Net investment gains:

Fixed maturity securities:

Gains
Losses

Equity securities (1):

Net realized (losses) gains on investment sales
Change in unrealized losses

Investment funds
Real estate (2)
Loans receivable
Other

Net realized and unrealized gains on investments in earnings before allowance for expected credit losses

Change in allowance for expected credit losses on investments:
Fixed maturity securities
Loans receivable

Change in allowance for expected credit losses on investments

Net investment gains

Income tax expense

After-tax net investment gains

Change in unrealized investment (losses) gains:

Fixed maturity securities without allowance for expected credit losses
Fixed maturity securities with allowance for expected credit losses
Investment funds
Other

Total change in unrealized investment (losses) gains

Income tax benefit (expense)
Noncontrolling interests

2022

2021

2020

4,224
(11,654)

18,981
(6,975)

(12,879)
(632)
12,407
293,525
(32)
(67,648)
217,311

(14,841)
(73)

(14,914)

202,397
(42,670)

16,365
(38,455)
44,778
94,911
(881)
(21,766)
106,958

(20,045)
3,719

(16,326)

90,632
(17,710)

159,727

72,922

(1,216,292)
(28,370)
(2,019)
(1,447)
(1,248,128)
264,325
(2)

(262,221)
10,124
(1,270)
(1,572)
(254,939)
56,127
(2)

27,819
(56,096)

32,647
(25,868)
31,481
101,554
—
(38,023)
73,514

33,134
(3,648)

29,486

103,000
(21,630)

81,370

134,129
32,004
2,280
(3,768)
164,645
(24,395)
(2)

140,248

After-tax change in unrealized investment (losses) gains

(983,805)

(198,814)

____________________
(1) The net realized gains or losses on investment sales represent the total gains or losses from the purchase dates of the equity securities. The change in
unrealized (losses) gains consists of two components: (i) the reversal of the gain or loss recognized in previous periods on equity securities sold and (ii) the
change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held.

(2) During March 2022, the Company realized a gain on the sale of a real estate investment in London, U.K. of $251 million, net of transaction expenses and
the foreign currency impact, including the reversal of the currency translation adjustment.

(12) Fixed Maturity Securities in an Unrealized Loss Position

The following tables summarize all fixed maturity securities in an unrealized loss position at December 31, 2022 and 2021 by the length of time those

securities have been continuously in an unrealized loss position.

(In thousands)
December 31, 2022
U.S. government and government agency
State and municipal
Mortgage-backed securities
Asset-backed securities
Corporate
Foreign government

Fixed maturity securities

December 31, 2021
U.S. government and government agency
State and municipal
Mortgage-backed securities
Asset-backed securities
Corporate
Foreign government

Fixed maturity securities

Less Than 12 Months

12 Months or Greater

Total

Fair
Value

Gross
Unrealized
Losses

Fair
Value

Gross
Unrealized
Losses

285,391
1,720,443
1,099,549
1,569,647
3,690,856
477,672
8,843,558

487,712
502,333
558,751
3,832,944
2,582,860
758,975
8,723,575

10,219
89,272
75,430
48,390
150,115
29,815
403,241

4,026
7,403
6,900
18,503
29,322
15,793
81,947

453,520
598,797
473,318
2,176,638
2,349,281
711,786
6,763,340

17,021
29,547
106,130
75,385
51,095
82,057
361,235

58,939
79,320
115,528
103,932
256,631
105,243
719,593

268
2,156
4,762
291
3,088
31,701
42,266

Fair
Value

738,911
2,319,240
1,572,867
3,746,285
6,040,137
1,189,458
15,606,898

504,733
531,880
664,881
3,908,329
2,633,955
841,032
9,084,810

Gross
Unrealized
Losses

69,158
168,592
190,958
152,322
406,746
135,058
1,122,834

4,294
9,559
11,662
18,794
32,410
47,494
124,213

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

December 31, 2022 is presented in the table below:

($ in thousands)

Foreign government
Corporate
State and municipal
Mortgage-backed securities
Asset-backed securities

Total

Number of
Securities

Aggregate
Fair Value

Gross
Unrealized
Loss

36
10
1
14
1

119,332
39,347
12,247
4,464
16

175,406

73,900
4,649
2,756
269
10

81,584

For fixed maturity securities that management does not intend to sell or to be required to sell, the portion of the decline in value that is considered to

be due to credit factors is recognized in earnings, and the portion of the decline in value that is considered to be due to non-credit factors is recognized in other
comprehensive income.

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.

(13) Fair Value Measurements

The Company’s fixed maturity and equity securities classified as available for sale and its 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 as of December 31, 2022 and 2021 by level:

(In thousands)
December 31, 2022
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency
State and municipal
Mortgage-backed securities
Asset-backed securities
Corporate
Foreign government

Total fixed maturity securities available for sale

Equity securities:
Common stocks
Preferred stocks

Total equity securities

Arbitrage trading account

Total

Liabilities:

Trading account securities sold but not yet purchased

December 31, 2021
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency
State and municipal
Mortgage-backed securities
Asset-backed securities
Corporate
Foreign government

Total fixed maturity securities available for sale

Equity securities:
Common stocks
Preferred stocks

Total equity securities

Arbitrage trading account

Total

Liabilities:

Trading account securities sold but not yet purchased

Total

Level 1

Level 2

Level 3

892,258
2,890,098
1,665,410
3,982,773
6,703,992
1,401,522

17,536,053

982,751
203,143

1,185,894
944,230
19,666,177

—
—
—
—
—
—

—

978,991
—

978,991
822,192
1,801,183

892,258
2,890,098
1,665,410
3,982,773
6,703,992
1,401,522

17,536,053

1,161
191,844

193,005
118,448
17,847,506

—
—
—
—

—

2,599
11,299

13,898
3,590
17,488

—

855,343
3,304,133
1,068,075
4,490,565
5,595,675
1,214,901

16,528,692

695,403
245,840

941,243

—
—
—
—
—
—

—

684,470
—

684,470

855,343
3,304,133
1,068,075
4,490,565
5,595,675
1,214,901

16,528,692

1,639
234,544

236,183

1,179,606
18,649,541

1,153,079
1,837,549

26,527
16,791,402

—
—
—
—
—
—

—

9,294
11,296

20,590

—
20,590

1,169

1,137

—

The following tables summarize changes in Level 3 assets and liabilities for the years ended December 31, 2022 and 2021:

Beginning
Balance

Earnings
(Losses)

Other
Comprehensive
Income (Losses)

Impairments

Purchases

Sales

Paydowns/Maturities

Transfers In
/ Out

Ending
Balance

Gains (Losses) Included in:

—
—

9,294
11,296

20,590

—
20,590

(6,695)
3

(6,692)

(179)
(6,871)

—
—

—

—
—

—

—
—

—
925

925

—
(925)

(925)

4,685
5,610

(917)
(1,842)

—
—

—

—
—

—

1
1

—
—

2,599
11,299

13,898

3,590
17,488

—

(In thousands)

Year ended December 31, 2022
Assets:
Fixed maturity securities available
for sale:

Corporate

Total

Equity securities:

Common stocks

Preferred stocks

Total

Arbitrage trading account

Total
Liabilities:
Trading account securities sold but
not yet purchased

Year ended December 31, 2021
Assets:
Fixed maturity securities available
for sale:

Corporate

Total

Equity securities:
Common stocks

Preferred stocks

Total

Arbitrage trading account

Total
Liabilities:
Trading account securities sold but
not yet purchased

1,000

9,215
9,331
18,546

—
19,546

—

640
(35)
605

8
613

—

—
—
—

—
—

—

—
—
—

—
—

—

(1,000)

—
2,000
2,000

—
2,000

(561)
—
(561)

(8)
(1,569)

—

—
—
—

—
—

—

—
—
—

—
—

—

9,294
11,296
20,590

—
20,590

—

(1)

—

For the years ended December 31, 2022 and 2021, there were no fixed maturity security transferred into or out of Level 3.

(14) Reserves for Losses and Loss Expenses

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

Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an actuarially derived point estimate

and other considerations. The Company uses a variety of actuarial techniques and methods to derive an actuarial point estimate for each business. These
methods may 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 business.

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 claims handling procedures, changes in the
mix of business, changes in distribution sources and changes in policy terms and conditions.

The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid

loss emergence patterns. Expected loss ratios represent management’s expectation of losses at the time the business is priced and written, before any actual
claims experience has emerged. This expectation is a significant determinant of the estimate of loss reserves for recently written business where there is little
paid or incurred loss data to consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost
trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business within each business. 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 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.

A claim may be defined as an event, as a claimant (number of parties claiming damages from an event) or by exposure type (e.g., an event may give

rise to two parties, each claiming loss for bodily injury and property damage).

The most commonly used claim count method is by event. Most of the Company's businesses use the number of events to define and quantify the

number of claims. However, in certain lines of business, where it is common for multiple parties to claim damages arising from a single event, a business may
quantify claims on the basis of the number of separate parties involved in an event. This may be the case with businesses writing substantial automobile or
transportation exposure.

Claim counts for assumed reinsurance will vary based on whether the business is written on a facultative or treaty basis. Further variability as respects

treaty claim counts may be reflective of the nature of the treaty, line of business coverage, and type of participation such as quota share or excess of loss
contracts. Accordingly, the claim counts have been excluded from the below Reinsurance & Monoline Excess segment tables due to this variability.

The claim count information set forth in the tables presented below may not provide an accurate reflection of ultimate loss payouts by product line.

The following tables present undiscounted incurred and paid claims development as of December 31, 2022, net of reinsurance, as well as cumulative
claim frequency and the total of incurred but not reported liabilities (IBNR). The information about incurred and paid claims development for the years ended
December 31, 2013 to 2021 is presented as supplementary information. To enhance the comparability of the loss development data, the Company has removed
the impact of foreign exchange rate movements by using the December 31, 2022 exchange rate for all periods.

Insurance

Other Liability
(In thousands)

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Total

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total

Loss and Loss Expenses Incurred, Net of Reinsurance

As of December 31, 2022

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

749,261 $

788,581 $
844,832

779,908 $
845,564
948,389

779,706 $
843,501
984,262
1,016,106

800,593 $
848,138
958,734
1,009,051
1,065,550

806,914 $
861,313
961,761
1,018,253
1,099,396
1,103,900

801,689 $
867,400
964,301
1,029,821
1,121,833
1,131,549
1,240,560

805,915 $
862,749
974,345
1,043,948
1,138,785
1,121,317
1,237,336
1,339,565

807,998 $
861,382
981,071
1,059,897
1,178,604
1,156,157
1,237,824
1,212,790
1,534,580

809,358 $
862,630
1,010,796
1,091,569
1,249,129
1,232,803
1,294,681
1,158,880
1,390,790
1,823,680
11,924,316

IBNR

21,362
35,808
55,430
96,310
142,974
181,880
292,625
489,718
841,854
1,507,284

Cumulative
Number of
Reported
Claims

26
28
27
28
28
27
28
22
23
20

Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

63,243 $

188,023 $
78,705

330,127 $
190,419
82,638

470,566 $
337,426
210,151
69,407

585,608 $
478,924
381,328
208,828
79,887

646,257 $
592,828
536,855
389,862
255,603
86,798

691,495 $
678,490
674,665
557,998
453,097
264,299
88,195

717,908 $
728,718
755,641
676,735
638,934
435,729
275,343
72,232

738,858 $
758,098
814,191
766,515
774,738
615,753
471,239
225,068
76,612

Reserves for loss and loss adjustment expenses before 2013, net of reinsurance

Reserves for loss and loss adjustment expenses, net of reinsurance $

2022

761,461
781,533
872,657
870,981
930,630
806,869
704,928
423,283
267,685
93,519
6,513,546
125,357
5,536,127

Workers' Compensation
(In thousands)

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Total

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total

Loss and Loss Expenses Incurred, Net of Reinsurance

As of December 31, 2022

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

552,570 $

547,295 $
639,436

546,995 $
637,307
712,800

543,238 $
627,767
690,525
702,716

547,000 $
617,242
650,997
696,339
762,093

542,274 $
615,435
641,169
684,700
733,505
778,964

541,926 $
604,030
626,432
660,520
689,622
724,697
784,281

540,322 $
600,194
620,741
651,278
673,216
715,055
721,018
725,245

538,503 $
602,000
617,478
657,972
683,880
724,056
732,762
716,430
742,687

534,948 $
598,977
612,687
654,385
682,153
721,170
734,034
704,008
701,703
772,620
6,716,685

IBNR

11,473
21,528
29,213
36,834
41,944
43,766
67,254
96,322
149,447
348,348

Cumulative
Number of
Reported
Claims

53
57
58
58
58
56
54
42
45
41

Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

117,900 $

277,538 $
148,405

363,028 $
319,743
139,320

414,160 $
412,611
323,744
142,998

447,894 $
471,235
421,734
338,835
153,456

466,580 $
503,915
477,541
446,072
362,299
171,006

479,104 $
521,141
512,933
504,850
468,817
397,464
184,715

489,075 $
531,475
531,512
537,861
525,753
508,546
397,376
172,478

496,809 $
538,914
544,849
558,934
559,198
574,889
515,914
380,454
172,729

Reserves for loss and loss adjustment expenses before 2013, net of reinsurance

Reserves for loss and loss adjustment expenses, net of reinsurance $

2022

502,181
547,894
557,215
572,669
583,258
613,675
581,003
485,203
384,867
180,982
5,008,947
214,233
1,921,971

Professional Liability
(In thousands)

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Total

Accident
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total

Loss and Loss Expenses Incurred, Net of Reinsurance

As of December 31, 2022

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

265,061 $

244,556 $
250,740

241,046 $
244,574
257,946

246,943 $
257,309
256,595
309,417

267,978 $
241,376
272,899
323,222
333,267

276,566 $
236,961
274,546
360,110
332,400
334,848

281,888 $
255,850
290,141
400,799
338,723
322,176
336,129

279,824 $
254,868
281,718
438,065
377,410
333,408
332,385
394,107

279,870 $
254,243
282,065
467,545
384,416
359,566
345,614
375,577
524,879

283,216 $
253,244
286,271
463,102
393,409
382,409
354,283
337,961
471,266
648,941
3,874,102

IBNR

4,681
12,284
19,949
33,241
53,786
73,828
93,387
159,767
315,877
543,483

Cumulative
Number of
Reported
Claims

7
7
8
9
10
10
11
11
11
10

Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

23,295 $

63,503 $
19,225

118,767 $
83,063
20,331

176,079 $
137,341
85,047
28,517

204,955 $
174,524
139,205
102,173
36,503

246,616 $
197,272
186,688
201,019
96,312
28,101

255,863 $
213,888
215,408
254,872
162,829
99,598
31,674

261,106 $
225,236
232,143
296,863
243,088
155,212
97,466
28,106

267,776 $
234,459
239,150
356,812
261,225
198,697
147,985
80,408
28,586

Reserves for loss and loss adjustment expenses before 2013, net of reinsurance

Reserves for loss and loss adjustment expenses, net of reinsurance $

273,094
237,145
246,031
404,742
306,713
244,284
200,521
129,168
86,056
33,446

2,161,200
36,484

1,749,386

Commercial Automobile
(In thousands)

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Total

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total

Loss and Loss Expenses Incurred, Net of Reinsurance

As of December 31, 2022

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

IBNR

Cumulative
Number of
Reported
Claims

327,514 $

349,136 $
363,891

368,894 $
385,241
389,577

376,243 $
416,802
415,446
429,329

366,646 $
414,732
421,522
429,074
430,440

366,166 $
412,120
429,608
440,334
428,419
442,610

365,275 $
411,920
430,557
441,408
430,198
462,544
483,019

364,207 $
407,470
428,981
438,192
434,170
478,966
488,291
523,736

364,439 $
406,589
426,107
437,884
439,991
494,315
504,813
428,759
614,422

364,607 $
407,970
427,923
439,682
444,472
521,667
530,876
442,163
596,810
792,553
4,968,723

103
403
1,362
2,244
4,800
10,720
22,483
31,172
111,412
342,905

44
47
53
52
47
46
45
30
38
40

Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

142,929 $

218,596 $
155,564

267,253 $
237,648
159,987

321,855 $
326,854
263,663
183,160

342,961 $
364,054
323,429
277,665
180,545

352,792 $
392,658
368,448
339,657
267,326
180,056

361,499 $
400,577
396,018
388,554
326,861
281,475
185,236

362,252 $
403,273
409,426
407,989
371,761
350,110
290,124
142,815

362,624 $
404,259
415,170
418,499
401,844
412,874
374,479
228,357
180,860

Reserves for loss and loss adjustment expenses before 2013, net of reinsurance

Reserves for loss and loss adjustment expenses, net of reinsurance $

2022

364,147
405,004
418,993
426,955
419,545
463,117
440,378
308,451
319,941
253,206
3,819,737
3,731
1,152,717

Short-tail lines
(In thousands)

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Total

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total

Loss and Loss Expenses Incurred, Net of Reinsurance

As of December 31, 2022

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

565,391 $

573,905 $
691,971

565,810 $
697,845
736,523

549,518 $
659,563
726,287
771,390

548,169 $
658,252
723,206
775,308
752,727

544,681 $
659,230
721,789
762,460
753,326
759,634

542,863 $
659,568
713,899
757,009
747,630
748,931
721,073

542,148 $
662,012
712,361
751,530
747,003
746,265
701,241
900,683

541,857 $
660,250
710,663
753,952
746,603
744,544
691,015
904,580
828,187

541,728 $
658,557
710,978
752,604
747,869
742,289
684,708
922,333
832,183
944,842
7,538,091

IBNR

1,125
1,549
3,842
3,363
8,195
11,491
18,311
24,934
57,246
235,121

Cumulative
Number of
Reported
Claims

25
30
32
34
42
48
43
38
36
32

Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

310,750 $

480,140 $
368,865

526,031 $
587,607
392,921

527,789 $
609,948
608,748
416,611

534,569 $
628,440
664,084
669,891
445,285

535,756 $
643,619
686,029
711,385
689,662
414,910

536,416 $
650,816
695,563
726,549
718,538
661,741
404,975

537,582 $
653,272
701,341
731,651
730,688
708,214
615,869
460,434

538,985 $
653,784
708,065
738,390
734,509
725,138
645,374
784,670
405,512

Reserves for loss and loss adjustment expenses before 2013, net of reinsurance

Reserves for loss and loss adjustment expenses, net of reinsurance $

2022

539,081
654,089
708,214
739,244
741,685
725,228
657,819
845,714
698,092
472,024
6,781,190
4,727
761,628

Reinsurance & Monoline Excess

Casualty
(In thousands)

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Total

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total

Loss and Loss Expenses Incurred, Net of Reinsurance

As of December 31, 2022

For the Year Ended December 31,
Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

IBNR

318,365 $

269,340 $
319,454

272,475 $
318,904
259,019

282,307 $
318,443
231,430
240,655

291,105 $
330,382
230,085
252,638
231,082

298,317 $
324,693
252,277
245,268
220,699
221,193

302,595 $
324,150
293,094
267,850
238,883
210,397
236,318

301,415 $
335,883
303,261
301,663
261,482
230,790
230,460
299,602

302,672 $
336,990
304,805
301,355
281,254
246,898
239,131
293,345
359,952

302,135 $
341,649
309,317
310,451
298,486
261,148
240,848
289,878
346,736
446,676

3,147,324

12,543
16,184
19,728
24,928
36,491
44,474
72,504
136,865
243,222
402,204

Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,
Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

28,945 $

63,745 $
21,297

108,852 $
68,374
17,888

144,331 $
115,779
48,442
19,904

178,060 $
155,070
91,140
61,770
16,469

205,553 $
197,996
141,254
100,200
40,085
11,076

225,882 $
227,448
178,521
140,299
69,350
40,953
14,560

241,573 $
252,155
205,289
171,719
123,614
77,498
39,091
20,750

254,273 $
271,512
233,643
205,354
147,311
109,474
64,020
49,664
10,918

Reserves for loss and loss adjustment expenses before 2013, net of reinsurance

Reserves for loss and loss adjustment expenses, net of reinsurance $

263,467
284,360
250,880
225,077
175,059
141,553
94,856
81,789
43,838
11,595

1,572,474
417,861

1,992,711

Monoline Excess
(In thousands)

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Total

Accident
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total

Loss and Loss Expenses Incurred, Net of Reinsurance

As of December 31, 2022

For the Year Ended December 31,
Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

IBNR

63,995 $

50,355 $
63,561

48,143 $
57,650
69,977

44,162 $
49,570
57,897
72,657

40,207 $
45,823
50,099
70,281
76,701

35,120 $
41,671
45,115
71,404
80,508
77,820

31,752 $
42,541
39,682
64,957
70,749
72,505
78,929

29,758 $
42,618
39,781
65,485
71,025
71,448
77,482
84,354

25,701 $
40,652
36,774
65,222
66,795
66,180
76,242
83,468
98,110

23,306 $
35,707
30,104
61,432
62,647
57,847
73,978
80,452
87,980
98,923

612,376

5,184
7,484
8,683
13,634
16,529
20,826
21,878
35,638
48,670
66,865

Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance

For the Year Ended December 31,
Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

647 $

1,897 $
377

3,588 $
2,341
2,069

3,008 $
3,354
2,481
2,498

3,396 $
4,175
3,272
4,783
6,282

4,418 $
5,808
4,099
5,573
12,810
6,141

5,349 $
7,595
4,416
5,928
15,356
8,230
6,241

6,476 $
11,154
5,083
7,685
17,327
9,368
10,884
4,869

8,805 $
11,938
5,421
9,883
18,375
10,359
12,728
8,699
4,586

9,490
13,491
6,457
11,819
19,275
12,414
15,436
10,471
6,026
5,898

Reserves for loss and loss adjustment expenses before 2013, net of reinsurance

110,777
644,712

Reserves for loss and loss adjustment expenses, net of reinsurance $

1,146,311

Property
(In thousands)

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Total

Accident
Year

2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total

Loss and Loss Expenses Incurred, Net of Reinsurance
For the Year Ended December 31,

Unaudited

As of December 31, 2022

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

IBNR

141,380 $

112,616 $
112,907

114,100 $
96,492
127,118

111,937 $
97,195
117,452
167,901

112,572 $
99,941
131,625
174,423
206,560

111,890 $
99,176
130,301
181,634
200,394
108,220

109,697 $
98,838
129,398
180,885
199,410
112,068
103,113

107,552 $
99,244
131,071
186,159
197,978
103,104
77,062
114,590

106,316 $
97,315
130,642
184,150
191,867
105,101
81,858
117,867
133,938

105,711 $
96,656
131,342
185,249
192,379
102,953
81,014
116,774
146,761
167,039

1,325,878

72
177
1,061
1,482
1,209
1,754
3,637
3,946
28,634
78,818

Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,

Unaudited

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

36,577 $

74,572 $
38,780

92,625 $
66,829
53,474

101,538 $
82,119
89,121
78,920

104,323 $
88,257
109,051
133,516
72,126

106,043 $
91,390
118,552
157,404
141,340
33,991

107,603 $
93,099
122,566
168,506
171,675
65,079
23,081

104,403 $
94,565
125,439
175,949
179,749
82,259
54,499
26,574

104,388 $
95,198
126,848
178,060
182,609
87,736
68,457
65,575
15,235

Reserves for loss and loss adjustment expenses before 2013, net of reinsurance

Reserves for loss and loss adjustment expenses, net of reinsurance $

105,059
95,633
127,995
182,411
185,823
94,870
71,054
86,888
71,797
25,584

1,047,114
1,036
279,800

The reconciliation of the net incurred and paid claims development tables to the reserves for losses and loss expenses in the consolidated balance sheet

is as follows:

(In thousands)
Undiscounted reserves for loss and loss expenses, net of reinsurance:

Other liability
Workers' compensation
Professional liability
Commercial automobile
Short-tail lines
Other

Insurance

Casualty
Monoline excess
Property

Total undiscounted reserves for loss and loss expenses, net of reinsurance

Reinsurance & Monoline Excess

(In thousands)
Due from reinsurers on unpaid claims:

Other liability
Workers' compensation
Professional liability
Commercial automobile
Short-tail lines
Other

Insurance

Casualty
Monoline excess
Property

Total due from reinsurers on unpaid claims

Reinsurance & Monoline Excess

December 31, 2022

5,536,127
1,921,971
1,749,386
1,152,717
761,628
124,586

11,246,415

1,992,711
1,146,311
279,800

3,418,822

14,665,237

December 31, 2022

730,029
221,769
1,019,810
67,895
414,549
97,511

2,551,563

108,390
35,926
66,465

210,781
2,762,344

(In thousands)
Loss reserve discount:

Other liability
Workers' compensation
Professional liability
Commercial automobile
Short-tail lines
Other

Insurance

Casualty
Monoline excess
Property

Reinsurance & Monoline Excess

Total loss reserve discount

Total gross reserves for loss and loss expenses

December 31, 2022

—
(12,491)
—
—
—
—

(12,491)

(84,668)
(319,199)
—

(403,867)

(416,358)

17,011,223

The following is supplementary information regarding average historical claims duration as of December 31, 2022:

Insurance

Years
Other liability
Workers' compensation
Professional liability
Commercial automobile
Short-tail lines

Reinsurance & Monoline Excess

Years
Casualty
Monoline excess
Property

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

6.9 %
23.5 %
7.4 %
36.1 %
54.7 %

2
13.7 %
29.9 %
17.6 %
20.9 %
32.8 %

3
16.3 %
15.7 %
17.7 %
15.5 %
5.8 %

4
16.0 %
9.1 %
15.7 %
11.5 %
2.0 %

5
13.1 %
5.5 %
9.1 %
6.7 %
1.0 %

9.2 %
3.2 %
10.3 %
2.8 %
0.8 %

6.7 %
2.1 %
5.1 %
1.6 %
0.4 %

4.2 %
1.7 %
2.6 %
0.4 %
0.1 %

2.7 %
1.5 %
3.0 %
0.1 %
0.2 %

2.8 %
1.0 %
1.9 %
0.4 %
— %

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
1

5.7 %
6.1 %
30.5 %

2
10.9 %
4.7 %
33.2 %

3
12.5 %
3.1 %
16.1 %

4
13.7 %
1.7 %
5.8 %

5
11.0 %
2.6 %
3.6 %

9.3 %
3.3 %
1.7 %

7.4 %
4.6 %
1.6 %

5.5 %
3.5 %
0.3 %

4.0 %
7.2 %
0.1 %

3.0 %
2.9 %
— %

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

(In thousands)
Net reserves at beginning of year

Cumulative effect adjustment resulting from changes in accounting principles (1)

Restated net reserves at beginning of period

Net provision for losses and loss expenses:

Claims occurring during the current year (2)
Increase in estimates for claims occurring in prior years (3)
Loss reserve discount accretion

Total

Net payments for claims:

Current year
Prior year

Total

Foreign currency translation
Net reserves at end of year
Ceded reserve at end of year

Gross reserves at end of year

Net change in premiums and losses occurring in prior years:

Increase in estimates for claims occurring in prior years (3)
Retrospective premium adjustments for claims occurring in prior years (4)

Net premium and reserve development on prior years

2022

2021

2020

12,848,362
—
12,848,362

11,620,393
—
11,620,393

5,774,713
54,511
32,526

5,861,750

1,068,577
3,279,333

4,347,910

(113,323)
14,248,879
2,762,344

4,921,191
863
31,906

4,953,960

887,896
2,777,798

3,665,694

(60,297)
12,848,362
2,542,526

17,011,223

15,390,888

(54,511)
18,106

(36,405)

(863)
7,510

6,647

10,697,998
5,927
10,703,925

4,432,937
627
35,142

4,468,706

921,054
2,677,595

3,598,649

46,411
11,620,393
2,164,037

13,784,430

(627)
16,807

16,180

_______________________________________
(1) The cumulative effect adjustment resulting from changes in accounting principals relates to the allowance for expected credit losses on reinsurance

recoverables that commenced on January 1, 2020 due to the adoption of ASU 2016-13. See Note 1 for more details.

(2) Claims occurring during the current year are net of loss reserve discounts of $35 million, $21 million and $10 million in 2022, 2021, and 2020,

respectively.

(3) The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in

prior years increased by $16 million in 2022, decreased by $19 million in 2021, and decreased by $21 million in 2020, respectively.

(4) For certain retrospectively rated insurance polices and reinsurance agreements, changes in loss and loss expenses for prior years are offset by additional or

return premiums.

The COVID-19 global pandemic has impacted, and may further impact, the Company’s results through its effect on claim frequency and severity.

Most of the COVID-19-related claims reported to the Company to date involve certain short-tailed lines of business, including contingency and event

The Company has estimated the potential COVID-19 impact to its contingency and event cancellation, workers’ compensation, and other lines of

business under a number of possible scenarios; however, due to COVID-19’s continued

evolving impact, there remains uncertainty around the Company’s COVID-19 reserves. In addition, should the pandemic continue or worsen as a result of new
COVID-19 variants or otherwise, governments in the jurisdictions where we operate may impose restrictions, including lockdowns, as well as renew their
efforts to expand policy coverage terms beyond the policy’s intended coverage. Accordingly, losses arising from these actions, and the other factors described
above, could exceed the Company’s reserves established for those related policies.

As of December 31, 2022, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately
$341 million, of which $290 million relates to the Insurance segment and $51 million relates to the Reinsurance & Monoline Excess segment. Such
$341 million of COVID-19-related losses included $337 million of reported losses and $4 million of IBNR. For the year ended December 31, 2022, the
Company recognized current accident year losses for COVID-19-related claims activity, net of reinsurance, of approximately $5 million, of which $3 million
relates to the Insurance segment and $2 million relates to the Reinsurance & Monoline Excess segment.

Unfavorable prior year development (net of additional and return premiums) was $36 million in 2022.

The unfavorable development mentioned above also includes favorable prior year development for the Insurance segment primarily attributable to the

2020 and 2021 accident years and unfavorable development on the 2015 through 2019 accident years. The favorable development on the 2020 and 2021
accident years was concentrated in certain casualty lines of business including general liability, professional 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 continued to
experience lower reported incurred losses relative to our expectations for these accident years as they developed 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.