Property insurance indemnifies an insured with an interest in physical property for loss of, or damage to, such property or the loss of its income-producing abilities. Casualty insurance is primarily concerned with losses caused by injuries to persons and legal liability imposed on the insured for such injury or for damage to property of others. In most cases, casualty insurance also obligates the insurance company to provide a defense for the insured in litigation, arising out of events covered by the policy.

Liabilities for losses and loss settlement expenses reflect management's best estimates at a given point in time of what we expect to pay for claims that have been reported and those that have been incurred but not reported ("IBNR"), based on known facts, circumstances, and historical trends. Because property and casualty insurance reserves are estimates of the unpaid portions of incurred losses that have been reported to us, as well as losses that have been incurred but not reported, the establishment of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and complex process. The ultimate cost of losses and related loss settlement expenses may vary materially from recorded amounts. We regularly update our reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in prior year reserve estimates, which may be material, are reported as a component of losses and loss settlement expenses incurred in the period such changes are determined.

The determination of reserves (particularly those relating to liability lines of insurance that have relatively longer lag in claim reporting) requires significant work to reasonably project expected future claim reporting and payment patterns. If, during the course of our regular monitoring of reserves, we determine that coverages previously written are incurring higher than expected losses, we will evaluate an appropriate response that may include, among other things, increasing the related reserves. Any adjustments we make to reserves are reflected in operating results in the year in which we make those adjustments. We engage an independent actuary, Regnier Consulting Group, Inc. ("Regnier"), to render an opinion as to the reasonableness of our statutory reserves annually. The actuarial opinion is filed in those states where we are licensed.

On a quarterly basis, our actuarial reserving department performs a detailed actuarial review of IBNR reserves. This review includes a comparison of results from the most recent analysis of reserves completed by both our internal and external actuaries. Senior management meets with our actuarial team to review, on a regular and quarterly basis, the adequacy of carried reserves based on results from this actuarial analysis. There are two fundamental types or sources of IBNR reserves. We record IBNR reserves for "normal" types of claims and also specific IBNR reserves related to unique circumstances or events. A major hurricane is an example of an event that might necessitate establishing specific IBNR reserves because an analysis of existing historical data would not provide an appropriate estimate.

carried loss IBNR. We also reviewed our methodology and assumptions in our product liability line, associated with our construction defects business and have revised our assumptions related to expected severity resulting in an increase to our IBNR reserves. Additionally, similar reviews were completed for standard umbrella and excess liability exposures which led to a change in assumptions related to severity, resulting in an increase in IBNR reserves for other liability. Besides the changes to our assumptions used for our commercial automobile, product liability and other liability lines, we continually review and revise items affecting our projections of required reserves for unpaid loss and LAE. Items reviewed and revised include development factors for paid and reported loss, paid development factors for allocated LAE, and ratios of paid unallocated LAE to paid loss.



Years Ended December 31,	2023		2022		2021
Gross liability for losses and loss settlement expenses at beginning of year	$	1,497,274	$	1,514,265	$	1,578,131
Ceded losses and loss settlement expenses	(146,875)		(112,900)		(131,843)
Net liability for losses and loss settlement expenses at beginning of year	$	1,350,399	$	1,401,365	$	1,446,288


Losses and loss settlement expenses incurred for claims occurring during
Current year	$	701,664	$	624,411	$	701,064
Prior years	67,750		12,890		(48,909)
Total incurred	$	769,414	$	637,301	$	652,155
Losses and loss settlement expense payments for claims occurring during
Current year	$	191,899	$	215,891	$	277,115
Prior years	480,800		472,377		419,963
Total paid	$	672,699	$	688,268	$	697,078
Net liability for losses and loss settlement expenses at end of year	$	1,447,115	$	1,350,399	$	1,401,365
Ceded losses and loss settlement expenses	191,640		146,875		112,900
Gross liability for losses and loss settlement expenses at end of year	$	1,638,755	$	1,497,274	$	1,514,265

There are a multitude of factors that can impact loss reserve development. Those factors include, but are not limited to: historical data, the potential impact of various loss reserve development factors and trends including historical loss experience, legislative enactments, judicial decisions, legal developments in imposition of damages, experience with alternative dispute resolution, results of our medical bill review process, the potential impact of salvage and subrogation and changes and trends in general economic conditions, including the effects of inflation. All of these factors influence our estimates of required reserves and for long tail lines these factors can change over the course of the settlement of the claim. However, there is no precise method for evaluating the specific monetary impact of any individual factor on the development of reserves.

Generally, we base reserves for each claim on the estimated ultimate exposure for that claim. We believe that it is appropriate and reasonable to establish a best estimate for reserves within a range of reasonable estimates, especially when we are reserving for claims for bodily injury, disabilities and similar claims, for which settlements and verdicts can vary widely. We believe our approach produces recorded reserves that are reasonably consistent as to their relative position within a range of reasonable reserves from year-to-year. However, conditions and trends that have affected the reserve development for a given year do change. Therefore, such development cannot be used to project future reserve redundancies or deficiencies.

We are not aware of any significant contingent liabilities related to environmental issues. Because of the type of property coverage we write, we have potential exposure to environmental pollution, mold and asbestos claims. Our underwriters are aware of these exposures and use riders or endorsements to limit exposure.

The significant drivers of the adverse reserve development in 2023 were the commercial other liability and commercial automobile lines of business. The adverse development in commercial other liability was primarily in our excess and surplus lines excess casualty book along with some adverse development in standard umbrella and construction defect due to increasing severity pressures. The pressure on these longer tailed lines, especially in accident years 2016-2019, related to social and economic inflation continued in 2023. The commercial automobile line of business also experienced adverse development related to increasing severity largely in post-COVID-19 accident years. The remaining lines experienced small amounts of reserve development.

The significant drivers of the adverse reserve development in 2022 were commercial other liability and commercial fire and allied lines. This was offset partially by favorable development in commercial automobile, workers' compensation and fidelity and surety. Commercial other liability experienced adverse development as emerging claim experience and deeper data insights during 2022 pointed to an increase in loss exposure on these longer tailed businesses driven in part by social and economic inflation. Commercial fire and allied developed adversely driven by catastrophe losses and increased severity on non-catastrophe claims. The favorable development for commercial automobile was from both loss and LAE where reductions of reserves for unpaid liabilities were more than sufficient to offset actual paid loss and paid LAE reductions in reserves for IBNR claims also contributed favorable development in addition to LAE where reductions in reserves were more than sufficient to offset payments.

The following tables provide information about incurred and paid losses and loss settlement expense development as of December 31, 2023, net of reinsurance, as well as cumulative development, cumulative claim frequency and IBNR liabilities. Claim data for Mercer Insurance Group, Inc., which was acquired on March 28, 2011, is presented retrospectively.

The cumulative number of reported claims, for calendar years 2023, 2022 and 2021, are counted for all lines of business on a per claimant per coverage basis and a single event may result in multiple claims due to the involvement of multiple individual claimants and/or multiple independent coverages. Claim counts for calendar years 2016 and prior are counted on a per claim and per coverage basis. Claim counts include open claims, claims that have been paid and closed, and reported claims that have been closed without the need for any payment.


Line of business: Commercial other liability
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2023
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development	Cumulative number of reported claims
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	118,928	$	117,958	$	106,486	$	97,809	$	102,487	$	105,507	$	107,417	$	111,517	$	111,558	$	112,733	$	2,806	(6,195)	6,838
2015			137,385		125,307		120,005		127,091		129,945		131,325		132,694		136,161		137,040		5,348		(345)	8,005
2016					139,144		130,041		136,275		142,397		140,784		148,324		153,490		159,284		8,576		20,140	9,627
2017							139,602		139,032		152,547		156,369		159,653		173,091		174,013		16,109		34,411	9,308
2018									163,059		172,894		176,496		187,841		197,696		207,501		21,311		44,442	9,184
2019											149,173		169,344		183,918		179,667		186,205		25,861		37,032	8,573
2020													171,013		158,022		162,471		179,080		37,085		8,067	6,392
2021															145,822		162,359		162,879		52,056		17,057	3,457
2022																	161,826		175,579		64,525		13,753	2,878
2023																			172,398		118,157			1,944
																	Total		$	1,666,711


Line of business: Commercial other liability
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	10,207	$	29,679	$	50,211	$	70,363	$	83,109	$	93,060	$	96,509	$	102,042	$	103,075	$	105,035
2015			11,185		27,182		53,901		74,292		96,339		104,472		109,540		117,734		126,364
2016					13,782		38,184		63,526		88,885		102,757		115,107		126,561		136,400
2017							17,716		43,172		70,500		91,984		111,085		128,430		138,127
2018									16,200		44,772		79,168		105,515		130,943		158,851
2019											18,221		46,986		72,179		102,510		127,650
2020													17,011		43,596		60,114		98,592
2021															12,434		33,642		59,278
2022																	10,468		42,168
2023																			9,335
																	Total		$	1,001,801
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2014, net of reinsurance														13,905
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	678,815


Line of business: Commercial fire and allied
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2023
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development	Cumulative number of reported claims
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	126,216	$	131,198	$	128,762	$	128,185	$	128,503	$	126,811	$	127,068	$	128,180	$	128,491	$	129,178	$	361	2,962	7,964
2015			103,177		108,293		110,633		108,235		105,218		104,646		105,043		104,978		105,385		400		2,208	7,598
2016					147,473		144,208		143,721		143,724		143,108		144,109		145,351		142,644		499		(4,829)	9,879
2017							155,139		160,240		160,945		161,693		161,232		161,456		161,611		573		6,472	13,519
2018									143,280		146,950		146,378		146,010		147,356		147,058		1,095		3,778	10,791
2019											164,030		155,482		158,475		157,667		155,850		2,191		(8,180)	11,208
2020													207,207		201,391		202,929		207,256		4,095		49	14,629
2021															156,794		169,669		157,905		(7,859)		1,111	5,342
2022																	161,776		170,594		18,916		8,818	4,225
2023																			164,526		59,002			3,223
																	Total		$	1,542,008


Line of business: Commercial fire and allied
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	84,456	$	113,663	$	116,750	$	122,370	$	123,697	$	125,745	$	126,307	$	127,883	$	128,033	$	128,403
2015			67,217		90,454		95,515		101,367		104,115		103,975		104,127		104,339		104,638
2016					92,895		125,962		132,429		137,907		139,353		141,104		142,248		141,008
2017							99,484		137,058		145,900		152,219		157,512		159,286		159,456
2018									92,770		123,559		133,703		137,794		141,841		145,021
2019											100,980		136,084		142,342		150,196		151,739
2020													128,704		173,055		192,902		197,602
2021															97,451		140,406		154,242
2022																	96,160		138,479
2023																			75,304
																	Total		$	1,395,891
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2014, net of reinsurance														1,453
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	147,570


Line of business: Commercial automobile
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2023
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development	Cumulative number of reported claims
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	107,723	$	106,076	$	113,720	$	118,869	$	120,385	$	121,077	$	120,599	$	119,214	$	121,311	$	121,230	$	154	13,507	17,327
2015			125,506		129,816		132,206		138,987		137,395		137,335		136,826		137,240		137,934		552		12,428	20,090
2016					174,018		175,357		174,337		175,655		173,823		174,588		175,016		175,387		1,407		1,369	27,309
2017							227,919		224,553		235,110		233,159		233,007		233,535		234,229		2,823		6,310	32,902
2018									236,629		245,173		253,045		255,017		255,409		255,198		3,309		18,569	34,487
2019											279,229		291,139		289,929		282,155		282,680		8,017		3,451	34,757
2020													243,360		216,951		196,412		194,162		6,893		(49,198)	24,181
2021															179,880		172,599		173,708		10,210		(6,172)	12,332
2022																	157,165		161,672		21,313		4,507	10,136
2023																			153,502		48,545			8,586
																	Total		$	1,889,702


Line of business: Commercial automobile
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	45,704	$	68,033	$	87,590	$	99,922	$	109,682	$	113,751	$	116,843	$	117,770	$	118,985	$	119,087
2015			50,782		78,225		99,201		118,395		129,317		134,100		135,462		137,075		137,085
2016					66,013		103,528		128,156		148,224		164,341		168,950		171,380		172,928
2017							81,311		126,644		166,170		197,893		212,947		223,076		228,749
2018									81,572		138,092		187,405		211,123		235,519		244,284
2019											91,919		153,244		205,614		246,800		264,151
2020													67,660		109,686		138,158		161,798
2021															64,381		99,116		128,283
2022																	62,477		95,785
2023																			56,175
																	Total		$	1,608,325
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2014, net of reinsurance														345
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	281,722


Line of business: Workers' compensation
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2023
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development	Cumulative number of reported claims
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	64,051	$	60,729	$	58,284	$	56,630	$	54,636	$	53,023	$	52,889	$	52,388	$	51,861	$	51,773	$	391	(12,278)	4,821
2015			53,788		55,578		51,003		46,682		46,019		44,706		43,751		43,209		43,654		851		(10,134)	5,683
2016					70,419		66,575		61,648		55,168		53,964		52,870		53,090		53,617		1,131		(16,802)	7,982
2017							76,184		69,528		55,982		51,874		49,362		47,801		48,074		1,590		(28,110)	8,216
2018									71,972		67,883		59,192		56,109		53,812		54,783		1,102		(17,189)	8,059
2019											52,136		49,189		49,336		48,945		49,084		(1,087)		(3,052)	7,415
2020													45,365		46,612		43,724		46,624		735		1,259	4,581
2021															45,177		42,283		39,649		(1,731)		(5,528)	1,875
2022																	29,597		26,721		1,623		(2,876)	1,307
2023																			29,262		6,455			1,025
																	Total		$	443,240


Line of business: Workers' compensation
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	13,965	$	30,289	$	38,441	$	42,964	$	45,193	$	45,825	$	46,299	$	46,664	$	47,192	$	47,548
2015			12,063		27,304		35,229		38,424		39,305		40,034		41,006		41,211		41,865
2016					14,413		32,345		40,680		45,743		47,082		48,277		50,127		51,023
2017							14,647		31,309		38,083		41,672		43,833		45,508		45,742
2018									16,949		35,369		43,189		47,173		48,807		49,964
2019											13,582		29,668		38,382		43,044		46,101
2020													17,603		29,605		35,542		39,479
2021															17,949		29,453		34,074
2022																	9,434		17,851
2023																			10,227
																	Total		$	383,875
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2014, net of reinsurance														13,649
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	73,014


Line of business: Personal
	Incurred losses and allocated loss settlement expenses, net of reinsurance																				As of December 31, 2023
	For the years ended December 31,																				Total of incurred but not reported liabilities plus expected development on reported claims		Cumulative development	Cumulative number of reported claims
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	53,910	$	52,661	$	52,944	$	52,782	$	52,615	$	52,702	$	52,810	$	52,854	$	52,910	$	52,975	$	9	(935)	10,969
2015			42,847		41,088		40,336		40,368		40,220		40,194		40,189		40,190		40,191		13		(2,656)	9,553
2016					48,072		45,840		45,379		45,961		45,113		45,297		45,199		45,179		22		(2,893)	11,905
2017							60,330		59,342		58,695		58,544		59,023		58,790		58,863		32		(1,467)	14,717
2018									51,639		51,721		52,715		52,062		51,457		51,115		113		(524)	13,688
2019											59,548		58,378		58,745		57,929		57,630		175		(1,918)	13,609
2020													81,206		73,761		73,204		72,531		588		(8,675)	17,095
2021															28,537		26,489		26,372		291		(2,165)	2,588
2022																	1,493		2,287		(556)		794	64
2023																			2,391		2,019			10
																	Total		$	409,534


Line of business: Personal
	Cumulative paid losses and allocated loss settlement expenses, net of reinsurance
	For the years ended December 31,
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
	(Unaudited)
2014	$	37,055	$	47,912	$	49,710	$	51,837	$	52,018	$	52,543	$	52,519	$	52,526	$	52,565	$	52,615
2015			29,551		37,431		39,027		39,428		39,865		40,029		40,053		40,053		40,053
2016					32,999		40,910		42,660		44,046		44,618		44,737		44,828		44,827
2017							42,135		53,111		55,982		57,169		57,824		58,206		58,377
2018									37,410		47,433		49,464		50,185		50,661		50,852
2019											40,544		52,390		54,935		56,658		56,852
2020													54,181		68,124		70,543		71,416
2021															20,298		23,829		24,889
2022																	551		2,128
2023																			297
																	Total		$	402,305
					All outstanding liabilities for unpaid losses and loss settlement expenses before 2014, net of reinsurance														340
					Liabilities for unpaid losses and loss settlement expenses, net of reinsurance														$	7,568


	December 31, 2023
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses:
Commercial other liability	$	678,815
Commercial fire and allied	147,570
Commercial automobile	281,722
Commercial workers' compensation	73,014
Personal	7,568
All other lines	170,119
Net outstanding liabilities for unpaid losses and allocated loss settlement expenses	1,358,808
Net outstanding liabilities for unpaid unallocated loss settlement expenses	87,949
Fair value adjustment (purchase accounting adjustment for Mercer acquisition)	560
Liabilities for unpaid losses and loss settlement expenses, net of reinsurance	1,447,317

Reinsurance recoverable on unpaid losses and allocated loss settlement expenses:
Commercial other liability	85,753
Commercial fire and allied	9,750
Commercial automobile	2,624
Commercial workers' compensation	38,231
Personal	294
All other lines	55,322
Reinsurance recoverable on unpaid losses and allocated loss settlement expenses	191,974

Reinsurance fair value amortization (purchase accounting adjustment for Mercer acquisition)	(536)
Total reinsurance recoverable on unpaid losses and loss settlement expenses	191,438
Total gross liability for unpaid losses and loss settlement expenses	$	1,638,755


	Average annual percentage payout of incurred claims by age, net of reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
	(Unaudited)
Commercial other liability	8.2	%	14.9	%	15.5	%	15.9	%	12.1	%	9.2	%	4.9	%	5.7	%	3.6	%	1.7	%
Commercial fire and allied	61.0	%	23.1	%	5.8	%	4.0	%	1.9	%	1.2	%	0.4	%	0.2	%	0.2	%	0.3	%
Commercial automobile	35.9	%	20.6	%	16.4	%	12.2	%	7.9	%	3.4	%	1.8	%	0.9	%	0.5	%	0.1	%
Commercial workers' compensation	32.4	%	31.9	%	15.0	%	8.3	%	3.8	%	2.1	%	1.8	%	0.9	%	1.3	%	0.7	%
Personal	62.0	%	24.2	%	4.0	%	2.2	%	0.8	%	0.5	%	0.1	%	—	%	—	%	0.1	%