W. R. Berkley(WRB) - 2025 Q2 - Quarterly Report

Part I — FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements, including balance sheets, income statements, and cash flows, with detailed accounting notes Item 1. Financial Statements Provides consolidated financial statements, including balance sheets, income statements, and cash flows, with extensive notes on accounting policies Consolidated Balance Sheets Presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Consolidated Balance Sheet Highlights (In thousands) | Item | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Total assets | $42,658,057 | $40,448,635 | | Total liabilities | $33,353,249 | $32,041,196 | | Total equity | $9,304,808 | $8,407,439 | | Reserves for losses and loss expenses | $21,496,123 | $20,368,030 | | Unearned premiums | $6,818,407 | $6,375,112 | Consolidated Statements of Income Details the company's revenues, expenses, and net income for the reported periods Consolidated Statements of Income Highlights (In thousands, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net premiums earned | $3,098,185 | $2,846,415 | $6,110,566 | $5,610,762 | | Net investment income | $379,303 | $372,129 | $739,595 | $691,967 | | Net investment gains (losses) | $30,973 | $(58,512) | $47,328 | $(32,733) | | Total revenues | $3,670,808 | $3,314,032 | $7,218,207 | $6,570,805 | | Total operating costs and expenses | $3,148,945 | $2,826,359 | $6,157,738 | $5,509,061 | | Net income to common stockholders | $401,288 | $371,909 | $818,860 | $814,380 | | Basic EPS | $1.01 | $0.93 | $2.06 | $2.03 | | Diluted EPS | $1.00 | $0.92 | $2.05 | $2.01 | Consolidated Statements of Comprehensive Income Reports net income and other comprehensive income items, reflecting changes in equity not from transactions with owners Consolidated Statements of Comprehensive Income Highlights (In thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income before noncontrolling interests | $400,708 | $371,885 | $818,058 | $813,920 | | Change in unrealized currency translation adjustments | $69,418 | $3,227 | $93,348 | $(24,343) | | Change in unrealized investment gains (losses), net of taxes | $120,265 | $(13,338) | $268,538 | $(83,460) | | Other comprehensive income (loss) | $189,683 | $(10,111) | $361,886 | $(107,803) | | Comprehensive income to common stockholders | $590,971 | $361,797 | $1,180,747 | $706,576 | Consolidated Statements of Stockholders' Equity Outlines changes in stockholders' equity, including retained earnings, net income, dividends, and treasury stock Consolidated Statements of Stockholders' Equity Highlights (In thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Retained earnings, beginning of period | $12,265,070 | $11,040,908 | | Net income to common stockholders | $818,860 | $814,380 | | Dividends paid | $(254,175) | $(185,721) | | Accumulated other comprehensive loss, end of period | $(572,384) | $(1,033,640) | | Treasury stock, end of period | $(4,126,967) | $(4,007,742) | Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities for the reported periods Consolidated Statements of Cash Flows Highlights (In thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net cash from operating activities | $1,447,624 | $1,627,565 | | Net cash used in investing activities | $(1,158,631) | $(992,305) | | Net cash used in financing activities | $(313,124) | $(408,121) | | Net change in cash and cash equivalents | $9,782 | $217,075 | | Cash and cash equivalents at end of period | $1,984,529 | $1,580,270 | Notes to Interim Consolidated Financial Statements Provides detailed explanations of accounting policies, estimates, and specific financial line items in the interim statements (1) General Outlines the basis of financial statement preparation and the effective income tax rate considerations - The financial statements are unaudited and prepared under U.S. GAAP for interim reporting, including normal recurring adjustments and management estimates[22][23] - The effective income tax rate is higher than the federal rate of 21% due to geographical earnings mix and state taxes, partially offset by tax-exempt investment income[24] (2) Per Share Data Explains the calculation of basic and diluted earnings per share and related share counts - Basic EPS is calculated by dividing net income by weighted average common shares outstanding, including shares in a grantor trust for vested RSUs[25] Weighted Average Common Shares (In thousands) | Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic | 397,016 | 400,273 | 396,972 | 401,295 | | Diluted | 400,368 | 403,737 | 400,098 | 404,679 | (3) Recent Accounting Pronouncements and Accounting Policies Discusses the impact of new accounting standards and the company's accounting policies - All accounting standards effective in 2025 had no material impact on the Company[27] - New guidance (ASU 2023-09) on income tax disclosures, primarily related to rate reconciliation and taxes paid, is effective for annual periods beginning after December 15, 2024[29] (4) Consolidated Statements of Comprehensive Income (Loss) Details changes in accumulated other comprehensive income (loss) for the reported periods Changes in Accumulated Other Comprehensive Income (Loss) (AOCI) (In thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | AOCI, Beginning of period | $(934,269) | $(925,838) | | Other comprehensive income (loss) | $361,886 | $(107,803) | | AOCI, End of period | $(572,384) | $(1,033,640) | (5) Statements of Cash Flows Provides additional details on cash payments for interest and income taxes Cash Payments (In thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | | Interest payments | $63,228 | $63,051 | | Income tax payments | $164,260 | $165,739 | (6) Investments in Fixed Maturity Securities Presents the carrying value and credit loss allowances for fixed maturity securities Fixed Maturity Securities (In thousands) | Item | June 30, 2025 (Carrying Value) | December 31, 2024 (Carrying Value) | | :----------------------------------- | :------------------------------- | :------------------------------- | | Total held to maturity | $30,051 | $44,412 | | Total available for sale | $24,063,105 | $22,353,453 | | Total investments in fixed maturity securities | $24,093,156 | $22,397,865 | | Allowance for expected credit losses (June 30, 2025) | $332 | | | Allowance for expected credit losses (December 31, 2024) | | $671 | - The allowance for expected credit losses for available-for-sale securities decreased in H1 2025 due to improved pricing of mortgage-backed securities[41] (7) Investments in Equity Securities Details the fair value of the company's equity securities portfolio Equity Securities (In thousands) | Item | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :------------------- | :--------------------------- | :--------------------------- | | Common stocks | $719,570 | $760,167 | | Preferred stocks | $542,622 | $443,621 | | Total equity securities | $1,262,192 | $1,203,788 | (8) Arbitrage Trading Account Describes the fair value and risk mitigation strategies for the arbitrage trading account - The arbitrage trading account's fair value was $1,035 million at June 30, 2025, down from $1,123 million at December 31, 2024[46] - The company uses put and call options to mitigate market risk in the merger arbitrage trading account, with long option contracts at $5 million and short option contracts at $31 million fair value as of June 30, 2025[47] (9) Net Investment Income Breaks down net investment income by source, including fixed maturity securities and investment funds Net Investment Income (In thousands) | Source | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Fixed maturity securities, etc. | $322,518 | $324,136 | $636,306 | $659,384 | | Investment funds | $27,268 | $25,476 | $54,291 | $(3,873) | | Arbitrage trading account | $23,672 | $16,682 | $40,001 | $34,693 | | Equity securities | $12,485 | $12,386 | $23,126 | $23,721 | | Real estate | $(4,092) | $(3,705) | $(8,109) | $(16,868) | | Gross investment income | $381,851 | $374,975 | $745,615 | $697,057 | | Net investment income | $379,303 | $372,129 | $739,595 | $691,967 | (10) Investment Funds Details the carrying value of investment funds by category and related transactions - The Company is not the primary beneficiary of its investment funds and accounts for them using the equity method[49] Investment Funds Carrying Value (In thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------- | :-------------- | :---------------- | | Financial services | $434,518 | $430,163 | | Transportation | $276,904 | $286,426 | | Real Estate | $181,509 | $178,685 | | Infrastructure | $161,019 | $151,560 | | Energy | $42,193 | $42,776 | | Other funds | $396,115 | $378,636 | | Total | $1,492,258 | $1,468,246 | - The Company ceded approximately $362 million in written premiums to Lifson Re (a minority investment in financial services funds) in H1 2025, up from $206 million in H1 2024[51] (11) Real Estate Presents the carrying value of real estate investments and projected rental income Real Estate Investments (In thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Properties in operation | $1,066,361 | $1,063,687 | | Properties under development | $228,144 | $227,768 | | Total | $1,294,505 | $1,291,455 | - Future minimum rental income from operating leases is projected to be $17.99 million in 2025, $37.37 million in 2026, and $411.07 million thereafter[54] (12) Loans Receivable Details the amortized cost and credit loss allowances for loans receivable Loans Receivable (In thousands) | Category | June 30, 2025 (Amortized Cost) | December 31, 2024 (Amortized Cost) | | :------------------- | :------------------------------- | :------------------------------- | | Real estate loans | $320,309 | $402,382 | | Commercial loans | $4,056 | $3,071 | | Total | $324,365 | $405,453 | - The allowance for expected credit losses for loans receivable decreased in H1 2025 due to the redemption of one loan and a decrease in the weighted average life of the remaining portfolio[56] (13) Net Investment Gains Summarizes net realized and unrealized investment gains and losses, including credit loss changes Net Investment Gains (Losses) (In thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net realized and unrealized gains (losses) on investments | $30,533 | $(60,306) | $46,244 | $(48,803) | | Change in allowance for expected credit losses on investments | $440 | $1,794 | $1,084 | $16,070 | | Net investment gains (losses) | $30,973 | $(58,512) | $47,328 | $(32,733) | | After-tax net investment gains (losses) | $24,288 | $(46,111) | $37,115 | $(26,964) | (14) Fixed Maturity Securities in an Unrealized Loss Position Analyzes fixed maturity securities with unrealized losses, assessing their credit quality and recovery expectations Fixed Maturity Securities in Unrealized Loss Position (In thousands) | Item | June 30, 2025 (Fair Value) | June 30, 2025 (Gross Unrealized Losses) | December 31, 2024 (Fair Value) | December 31, 2024 (Gross Unrealized Losses) | | :----------------------------------- | :--------------------------- | :------------------------------- | :--------------------------- | :------------------------------- | | Total fixed maturity securities | $8,826,857 | $521,660 | $12,547,868 | $708,728 | - Substantially all securities in an unrealized loss position are investment grade, except for foreign government securities, where a significant portion of the loss is due to currency exchange rates[63] - The company believes unrealized losses are primarily due to temporary market and sector-related factors, not issuer-specific credit issues, and expects issuers to meet contractual obligations[65] (15) Fair Value Measurements Explains the categorization of fair value measurements and provides a breakdown of assets by fair value level - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[66][67] - Substantially all fixed maturity securities are priced by independent pricing services based on observable market data and classified as Level 2[68][168] Assets Measured at Fair Value (In thousands) | Item | June 30, 2025 (Total) | June 30, 2025 (Level 1) | June 30, 2025 (Level 2) | June 30, 2025 (Level 3) | | :----------------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Total fixed maturity securities available for sale | $24,063,105 | $0 | $24,043,129 | $19,976 | | Total equity securities | $1,262,192 | $716,561 | $534,806 | $10,825 | | Arbitrage trading account | $1,034,557 | $905,421 | $125,391 | $3,745 | | Total | $26,359,854 | $1,621,982 | $24,703,326 | $34,546 | (16) Reserves for Loss and Loss Expenses Discusses the estimation of loss reserves, key actuarial assumptions, and prior year development - Loss reserves are management's best estimates based on actuarial techniques (e.g., paid/incurred loss development, Bornhuetter-Ferguson) and qualitative factors like re-underwriting initiatives and business mix changes[75][76][133][134] - Key assumptions include expected loss ratios, loss cost inflation, and reported/paid loss emergence patterns, with greater uncertainty for long-tail lines and assumed reinsurance[77][79][135][137][139] Net Reserves for Losses and Loss Expenses (In thousands) | Item | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Insurance segment | $14,815,570 | $13,881,574 | | Reinsurance & Monoline Excess segment | $3,402,454 | $3,285,067 | | Total Net reserves | $18,218,024 | $17,166,641 | | Total Gross reserves | $21,496,123 | $20,368,030 | - For H1 2025, favorable prior year development (net of premiums) was $1 million, with $20 million favorable for Reinsurance & Monoline Excess (assumed property) largely offset by $19 million adverse for Insurance (other liability, commercial auto liability due to social inflation)[84][85][87][146][147][149] (17) Fair Value of Financial Instruments Presents the carrying and fair values of various financial instruments, including debt and debentures Fair Value of Financial Instruments (In thousands) | Item | June 30, 2025 (Carrying Value) | June 30, 2025 (Fair Value) | December 31, 2024 (Carrying Value) | December 31, 2024 (Fair Value) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Fixed maturity securities | $24,093,156 | $24,094,270 | $22,397,865 | $22,399,426 | | Equity securities | $1,262,192 | $1,262,192 | $1,203,788 | $1,203,788 | | Loans receivable | $324,365 | $324,699 | $405,453 | $405,248 | | Senior notes and other debt | $1,831,638 | $1,438,943 | $1,831,158 | $1,425,852 | | Subordinated debentures | $1,010,168 | $766,884 | $1,009,808 | $805,864 | - Fair values for loans receivable, senior notes, and subordinated debentures are estimated using current institutional purchaser yield requirements or spreads for similar securities, classified as Level 2 inputs[93] (18) Premiums and Reinsurance Related Information Details net premiums written and earned, ceded losses, and credit loss allowances for reinsurance receivables Premiums and Reinsurance (In thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Total net premiums written | $6,484,742 | $5,978,070 | | Total net premiums earned | $6,110,566 | $5,610,762 | | Ceded losses and loss expenses incurred | $669,175 | $633,194 | | Ceded commissions earned | $275,523 | $244,701 | - Allowance for expected credit losses on premiums and fees receivable decreased from $39.88 million to $38.96 million in H1 2025[94] - Allowance for expected credit losses associated with due from reinsurers decreased from $8.35 million to $6.95 million in H1 2025[95] (19) Restricted Stock Units Describes the vesting and expense recognition for restricted stock units issued - RSUs generally vest three to five years from the award date and are expensed pro-ratably over the vesting period[97] Restricted Stock Units (RSUs) Issued | Year | Units (in thousands) | Fair Value (in thousands) | | :--- | :------------------- | :------------------------ | | 2025 | 20,995 | $1,235 | | 2024 | 2,277 | $125 | (20) Litigation and Contingent Liabilities Outlines ongoing legal disputes and contingent liabilities, primarily related to insurance claims - The company is subject to disputes and litigation in the ordinary course of business, generally related to insurance and reinsurance claims[98] - A subsidiary filed a lawsuit to recover over $90 million from reinsurers for event cancellation losses, with a positive resolution expected and no material impact on financial condition[99] (21) Leases Details the company's operating lease assets, liabilities, and associated costs - The company recognizes right-of-use assets and lease liabilities for operating leases over 12 months, primarily for office space[100][102] Lease Information (In thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Lease cost | $25,998 | $22,403 | | Right-of-use assets (June 30, 2025) | $210,884 | | | Lease liabilities (June 30, 2025) | $249,189 | | | Weighted-average remaining lease term (June 30, 2025) | 7.3 years | | | Weighted-average discount rate (June 30, 2025) | 5.82% | | (22) Business Segments Provides financial performance and net premiums earned for the company's Insurance and Reinsurance segments - The company operates in two main segments: Insurance (commercial, excess & surplus, specialty personal lines globally) and Reinsurance & Monoline Excess (facultative and treaty reinsurance, excess risk retention)[105][109] Segment Pre-Tax Income (Loss) (In thousands) | Segment | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | | Insurance | $1,022,177 | $968,202 | | Reinsurance & Monoline Excess | $247,679 | $252,074 | | Corporate, other and eliminations | $(256,715) | $(125,799) | | Net investment gains (losses) | $47,328 | $(32,733) | | Total | $1,060,469 | $1,061,744 | Net Premiums Earned by Major Line of Business (In thousands) | Line of Business | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Insurance: | | | | Other liability | $2,177,060 | $1,969,247 | | Short-tail lines | $1,216,096 | $1,049,606 | | Auto | $795,581 | $715,593 | | Workers' compensation | $629,910 | $612,060 | | Professional liability | $552,644 | $536,832 | | Reinsurance & Monoline Excess: | | | | Casualty | $366,670 | $396,924 | | Property | $233,979 | $199,638 | | Monoline excess | $138,626 | $130,862 | | Total | $6,110,566 | $5,610,762 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, key profitability drivers, and critical accounting estimates for recent periods Overview Provides an overview of the company's business model, profitability drivers, and strategic approach to market opportunities - W. R. Berkley Corporation is a decentralized insurance holding company specializing in commercial lines and reinsurance globally[121] - Profitability is driven by adequate premium rates (influenced by claim severity/frequency, disasters, regulations, economic inflation) and investment income (primarily from fixed maturity securities, also equity, arbitrage, funds, loans, real estate)[123][124][125] - The company's strategy includes forming new operating units to capitalize on business opportunities in various sectors and international markets[122] Critical Accounting Estimates Highlights key accounting estimates, particularly loss reserves and credit loss allowances, and the methodologies used for their determination - Reserves for losses and loss expenses are critical estimates, involving complex and subjective judgments due to the time lag between loss occurrence and payment, and are subject to revision[128][131][132] - The company uses various actuarial techniques (e.g., paid/incurred loss development, Bornhuetter-Ferguson) and qualitative factors to estimate loss reserves, with key assumptions including expected loss ratios, loss cost inflation, and emergence patterns[133][134][135] - Allowance for expected credit losses on fixed maturity securities and loans receivable is estimated using a third-party model based on collateral performance under various economic and default scenarios[159][160] Results of Operations for the Six Months Ended June 30, 2025 and 2024 Analyzes the company's consolidated financial performance for the six-month periods, including key revenue, expense, and profitability metrics Consolidated Financial Performance (6 Months Ended June 30) | Item | 2025 | 2024 | Change (YoY) | | :----------------------------------- | :----------- | :----------- | :----------- | | Net income to common stockholders | $818,860 | $814,380 | +$4,480 | | Diluted EPS | $2.05 | $2.01 | +$0.04 | | Gross premiums written | $7,661,708 | $7,080,528 | +8.2% | | Net premiums written | $6,484,742 | $5,978,070 | +8.5% | | Net premiums earned | $6,110,566 | $5,610,762 | +8.9% | | GAAP combined ratio | 91.3% | 90.0% | +1.3 pts | | Net investment income | $739,595 | $691,967 | +6.9% | | Net realized and unrealized gains (losses) on investments | $46,244 | $(48,803) | +$95,047 | | Catastrophe losses (net of reinsurance) | $210,000 | $120,000 | +$90,000 | | Favorable prior year reserve development (net of premium offsets) | $1,000 | $2,000 | -$1,000 | | Effective income tax rate | 22.9% | 23.3% | -0.4 pts | - The increase in net income was primarily driven by higher net investment gains (mainly unrealized gains on equity securities) and net investment income, partially offset by increased foreign currency losses and higher catastrophe losses[174] - Average renewal premium rates for insurance and facultative reinsurance increased by 7.0% (7.9% excluding workers' compensation) in 2025[176] Results of Operations for the Three Months Ended June 30, 2025 and 2024 Analyzes the company's consolidated financial performance for the three-month periods, including key revenue, expense, and profitability metrics Consolidated Financial Performance (3 Months Ended June 30) | Item | 2025 | 2024 | Change (YoY) | | :----------------------------------- | :----------- | :----------- | :----------- | | Net income to common stockholders | $401,288 | $371,909 | +$29,379 | | Diluted EPS | $1.00 | $0.92 | +$0.08 | | Gross premiums written | $3,977,769 | $3,717,772 | +7.0% | | Net premiums written | $3,351,439 | $3,126,779 | +7.2% | | Net premiums earned | $3,098,185 | $2,846,415 | +8.8% | | GAAP combined ratio | 91.6% | 91.1% | +0.5 pts | | Net investment income | $379,303 | $372,129 | +1.9% | | Net realized and unrealized gains (losses) on investments | $30,533 | $(60,306) | +$90,839 | | Catastrophe losses (net of reinsurance) | $99,000 | $90,000 | +$9,000 | | Favorable prior year reserve development (net of premium offsets) | $1,000 | $1,000 | No change | | Effective income tax rate | 23.2% | 23.7% | -0.5 pts | - The increase in net income was primarily due to higher net investment gains (mainly unrealized gains on equity securities) and net investment income, partially offset by increased foreign currency losses[195] - Average renewal premium rates for insurance and facultative reinsurance increased by 6.7% (7.6% excluding workers' compensation) in 2025[196] Investments Details the company's investment strategy, portfolio composition, and management of interest rate risk - The company's investment strategy focuses on maintaining liquidity, matching asset and liability durations, and maximizing total return across fixed maturity securities, equity securities, investment funds, real estate, arbitrage trading, and loans receivable[215][216][219][220][226] Investment Portfolio Composition (June 30, 2025, In thousands) | Asset Class | Carrying Value | Percent of Total | | :----------------------------------- | :------------- | :--------------- | | Fixed maturity securities | $24,093,156 | 76.3% | | Equity securities | $1,262,192 | 4.0% | | Cash and cash equivalents | $2,076,351 | 6.6% | | Investment funds | $1,492,258 | 4.7% | | Real estate | $1,294,505 | 4.1% | | Arbitrage trading account | $1,034,557 | 3.3% | | Loans receivable | $324,365 | 1.0% | | Total investments | $31,577,384 | 100.0% | - The effective duration of the fixed maturity portfolio was 2.8 years at June 30, 2025, up from 2.6 years at December 31, 2024, reflecting efforts to manage interest rate risk[216][226] Liquidity and Capital Resources Assesses the company's cash flow, investment liquidity, capital structure, and share repurchase activities - Cash flow from operating activities decreased to $1,448 million in H1 2025 from $1,628 million in H1 2024, primarily due to increased loss payments offset by higher premium receipts[228] - The investment portfolio is highly liquid, with approximately 83% in cash, cash equivalents, and marketable fixed maturity securities as of June 30, 2025, ensuring funds for claim payments[229] Debt and Equity Highlights (In millions) | Item | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Total common stockholders' equity | $9,300 | $8,400 | | Common shares outstanding | 379,385,332 | 380,066,070 | | Total capitalization (equity, debt, subordinated debentures) | $12,100 | $11,200 | | Percentage of capital from senior notes, subordinated debentures, and other debt | 23% | 25% | - The company repurchased 850,000 common shares for $49 million during H1 2025[232] Item 3. Quantitative and Qualitative Disclosure About Market Risk Refers to market risk disclosures, including credit quality, interest rates, and currency risk, detailed in the Investments section - Market risk disclosures, including those related to credit quality, interest rates, and currency risk, are detailed in the "Investments - Market Risk" section of the MD&A[235] Item 4. Controls and Procedures Confirms the effectiveness of disclosure controls and the absence of material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[236] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[237] PART II — OTHER INFORMATION Provides additional information not covered in Part I, including legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings Refers to Note 20 for details on legal proceedings, primarily related to insurance and reinsurance claims - Legal proceedings information is detailed in Note 20 to the interim consolidated financial statements[238] Item 1A. Risk Factors States that no material changes to previously disclosed risk factors have occurred since the last annual report - No material changes to risk factors have occurred since the Annual Report on Form 10-K for FY2024[239] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports no share repurchases during the quarter and the unchanged authorized repurchase amount - The company did not repurchase any shares during the three months ended June 30, 2025[240] - The number of shares authorized for repurchase remained at 13,308,928[240] Item 5. Other Information States that no directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025[241] Item 6. Exhibits Lists the exhibits filed with the Form 10-Q, including corporate documents and certifications - Exhibits include the Company's Restated Certificate of Incorporation and certifications from the CEO and CFO[242] SIGNATURES Contains the signatures of the President, CEO, and CFO, certifying the report's filing - The report is signed by W. Robert Berkley, Jr., President and Chief Executive Officer, and Richard M. Baio, Executive Vice President - Chief Financial Officer[245]