AXIS CAPITAL HOLDINGS LTD (AXS)

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our results of operations for the three and six months ended June 30, 2026 and 2025 and our financial condition at June 30, 2026 and December 31, 2025. This should be read in conjunction with Item 1 'Consolidated Financial Statements' of this report and our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. Unless otherwise noted, tabular dollars are in thousands, except per share amounts. Amounts in tables may not reconcile due to rounding differences.

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SECOND QUARTER 2026 FINANCIAL HIGHLIGHTS

Second Quarter 2026 Consolidated Results of Operations

•Net income available to common shareholders of $251 million, or $3.38 per diluted common share

•Operating income(1) of $211 million, or $2.84 per diluted common share(1)

•Gross premiums written of $2.7 billion

•Net premiums written of $1.6 billion

•Net premiums earned of $1.5 billion

•Pre-tax, catastrophe and weather-related losses, net of reinsurance, of $80 million ($63 million, after-tax), (Insurance: $78 million; Reinsurance: $3 million), or 5.3 points, including natural catastrophe losses of $49 million, or 3.2 points. The remaining losses of $31 million, or 2.1 points, were attributable to the Middle East Conflict

•Net favorable prior year reserve development of $15 million (Insurance: $12 million; Reinsurance: $3 million)

•Underwriting income(2) of $143 million and combined ratio of 93.1%

•Fees related to arrangements with strategic capital partners of $22 million, including $17 million recognized as a reimbursement of general and administrative expenses

•Net investment income of $182 million

•Net investment gains of $47 million

•Reorganization expenses of $6 million primarily related to the continued implementation of initiatives undertaken to streamline our operations, initiated in the first quarter of 2026.

•Income tax expense of $61 million, resulting in an effective tax rate of 19.2%

Second Quarter 2026 Consolidated Financial Condition

•Total cash and invested assets of $17.8 billion; fixed maturities, short-term investments, and cash and cash equivalents comprise 87% of total cash and investments and have an average credit rating of AA-

•Total assets of $36.6 billion

•Reserve for losses and loss expenses of $18.6 billion and reinsurance recoverable on unpaid and paid losses and loss expenses of $9.6 billion

•Debt of $1.3 billion and debt to total capital ratio(3) of 16.8%

•Total common shares repurchased were 978,000 shares for a total of $97 million, including $89 million repurchased pursuant to our Board-authorized share repurchase programs, and $8 million from employees to facilitate the satisfaction of their personal withholding tax liabilities that arise on vesting of share-settled restricted stock units

•Common shareholders’ equity of $6.0 billion; book value per diluted common share of $80.67

(1)Operating income (loss) and operating income (loss) per diluted common share are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K. The reconciliations to the most comparable GAAP financial measures, net income (loss) available (attributable) to common shareholders and earnings (loss) per diluted common share, respectively, and a discussion of the rationale for the presentation of these items are provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures Reconciliation'.

(2)Consolidated underwriting income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to the most comparable GAAP financial measure, net income (loss), is presented in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Consolidated Results of Operations', and a discussion of the rationale for its presentation is provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures Reconciliation'.

(3)The debt to total capital ratio is calculated by dividing debt by total capital. Total capital represents the sum of total shareholders’ equity and debt.

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OVERVIEW

Business Overview

AXIS Capital, through its operating subsidiaries, is a global specialty underwriter and provider of insurance and reinsurance solutions with locations in Bermuda, the United States, Europe, Singapore and Canada. Our underwriting operations are organized around our global underwriting platforms, AXIS Insurance and AXIS Re.

We provide our clients and distribution partners with a broad range of risk transfer products and services, and strong capacity, backed by excellent financial strength. We manage our portfolio holistically, aiming to construct the optimum portfolio of risks, consistent with our risk appetite and the development of our franchise. We nurture an ethical, entrepreneurial, disciplined and inclusive culture that promotes outstanding client service, intelligent risk taking, operating efficiency, sustainability and the achievement of superior risk-adjusted returns for our shareholders. We believe that the achievement of our objectives will position us as a global specialty underwriting leader. The execution of our business strategy for the first six months of 2026 included the following:

•growing in a number of targeted specialty lines insurance and reinsurance markets including U.S. excess and surplus lines and Lloyd's specialty insurance business with a focus on short-tail lines;

•cycle-managing our portfolio towards attractive lines of business, that carry premium adequate returns while deploying capital within risk limits, diversification criteria and risk management strategy;

•investing in attractive growth markets and advancing capabilities to address more transactional specialist business targeting the lower middle market with our key distribution partners;

•leveraging our global platform to introduce our products and services to new regions including the continued expansion of our North America product capabilities;

•continuing the implementation of a more focused distribution strategy while building mutually beneficial relationships with clients and partners;

•improving the effectiveness and efficiency of our operating platforms and processes through our "How We Work" program;

•investing in data and technology, together with AI capabilities and tools, to enhance productivity, empower our teammates and enhance the service that we provide to our customers;

•utilizing reinsurance markets and third-party capital relationships; and

•fostering a positive workplace environment that enables us to attract, retain and develop top talent.

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Outlook

AXIS is executing with clarity and conviction in our strategy to be a leading global specialty underwriter, delivering durable, profitable growth across market cycles. Our differentiated market positioning – anchored by a diversified specialty portfolio, deep underwriting expertise, a global operating platform, strong claims and risk management capabilities, and global multivariate distribution model – provides a powerful foundation for continued value creation. This is reinforced by a conservative, high‑quality investment portfolio that enhances earnings resilience and capital flexibility.

The global trade and geopolitical landscape remain fluid, introducing uncertainty across economic conditions, loss costs, and capital deployment. AXIS is built to operate effectively in dynamic risk environments. We proactively assess evolving risks and translate uncertainty into specialized insurance solutions through disciplined pricing, portfolio management, and rigorous risk selection. Our underwriting framework is designed to protect outsized downside outcomes while positioning the business to capitalize on market dislocations as they emerge.

The following are some key trends shaping our markets that underscore the strength of our approach:

•Pricing dynamics are evolving following multiple years of rate increases that exceeded loss cost trends. Market conditions are softening with variances across the various "micro markets" where AXIS competes: casualty lines continue to achieve positive rate momentum, financial lines pricing remains stable, and property markets continue to experience pressure from increased capital inflows that are fueling global market competition. We are deliberately managing capital deployment where premium adequacy remains compelling. This approach includes ensuring volatility is appropriately priced while seeking additional market dislocations and opportunities at target returns.

•Distribution dynamics remain constructive for disciplined specialty underwriters. In North America, submission growth through the wholesale channel remains steady as market conditions vary by line of business, reinforcing the importance of underwriting selectivity. In the London Market, increasingly granular "micro‑markets" by line of business and channel continue to reward technical underwriting expertise and strong broker relationships. These conditions play directly to AXIS, strengths and support sustainable, profitable growth.

•Reinsurance pricing is moderating, with outcomes varying by line of business and structure. We expect this environment to persist and continue to manage our reinsurance portfolio with a singular focus on margin, volatility management, and long‑term profitability.

Across AXIS, we are actively deploying capital in areas where pricing supports our return thresholds and scaling back where it does not. Growth is a consequence of disciplined underwriting – not an objective in isolation. With a strengthened portfolio, improved mix, and expanding presence in our chosen specialty markets, AXIS is well positioned to generate attractive, risk‑adjusted returns and drive profitable growth through 2026.

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CONSOLIDATED RESULTS OF OPERATIONS

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[Excerpt truncated for page length; source filing is linked above.]

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

The following is a discussion and analysis of our results of operations for the years ended December 31, 2025 and 2024, and our financial condition at December 31, 2025 and 2024. This should be read in conjunction with Item 8 'Financial Statements and Supplementary Data' of this report. Unless otherwise noted, tabular dollars are in thousands, except per share amounts. Amounts may not reconcile due to rounding differences.

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2025 FINANCIAL HIGHLIGHTS

2025 Consolidated Results of Operations

•Net income available to common shareholders of $979 million, or $12.52 per common share, and $12.35 per diluted common share

•Operating income(1) of $1.0 billion, or $12.92 per diluted common share(1)

•Gross premiums written of $9.6 billion

•Net premiums written of $6.1 billion

•Net premiums earned of $5.7 billion

•Pre-tax catastrophe and weather-related losses, net of reinsurance, were $159 million ($127 million, after-tax), (Insurance: $156 million; Reinsurance: $3 million) or 2.8 points, including natural catastrophe and weather-related losses of $137 million or 2.4 points, primarily attributable to California Wildfires, Hurricane Melissa and other weather-related events. The remaining losses of $22 million or 0.4 points were attributable to the Middle East Conflict.

•Net favorable prior year reserve development of $87 million

•Underwriting income(2) of $725 million and combined ratio of 89.8%

•Net investment income of $767 million

•Net investment gains of $59 million

•Foreign exchange losses of $142 million

•Income tax expense of $217 million, inclusive of a Bermuda deferred tax benefit of $19 million. Refer to 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Overview – Recent Developments – Bermuda Corporate Income Tax Act 2023 for further details.

2025 Consolidated Financial Condition

•Total cash and investments of $17.2 billion; fixed maturities, short-term investments, and cash and cash equivalents comprise 86% of total cash and investments and have an average credit rating of AA-

•Total assets of $34.5 billion

•Reserve for losses and loss expenses of $18.1 billion and reinsurance recoverable on unpaid and paid losses and loss expenses of $9.6 billion.

•Debt of $1.3 billion and a debt to total capital ratio(3) of 17.2%

•Total common shares repurchased were 10 million shares for a total of $914 million, including $888 million repurchased pursuant to our Board-authorized share repurchase programs, and $27 million from employees to facilitate the satisfaction of their personal withholding tax liabilities that arise on vesting of share-settled restricted stock units

•Common shareholders’ equity of $5.8 billion; book value per diluted common share of $77.20

(1) Operating income (loss) and operating income (loss) per diluted common share are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K. The reconciliations to the most comparable GAAP financial measures, net income (loss) available (attributable) to common shareholders and earnings (loss) per diluted common share, respectively, and a discussion of the rationale for the presentation of these items are provided in 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures Reconciliation'.

(2)Consolidated underwriting income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to the most comparable GAAP financial measure, net income (loss), is presented in 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Consolidated Results of Operations', and a discussion of the rationale for its presentation is provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures Reconciliation'.

(3)The debt to total capital ratio is calculated by dividing debt by total capital. Total capital represents the sum of total shareholders’ equity and debt.

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OVERVIEW

Business Overview

AXIS Capital, through its operating subsidiaries, is a global specialty underwriter and provider of insurance and reinsurance solutions with operations in Bermuda, the U.S., Europe, Singapore and Canada. Our underwriting operations are organized around our global underwriting platforms, AXIS Insurance and AXIS Re.

We provide our clients and distribution partners with a broad range of risk transfer products and services, and strong capacity, backed by excellent financial strength. We manage our portfolio holistically, aiming to construct the optimum portfolio of risks, consistent with our risk appetite and the development of our franchise. We nurture an ethical, entrepreneurial, disciplined and diverse culture that promotes outstanding client service, intelligent risk taking, operating efficiency, sustainability and the achievement of superior risk-adjusted returns for our shareholders. We believe that the achievement of our objectives will position us as a global specialty underwriting leader. The execution of our business strategy in 2025 included the following:

•growing in a number of targeted specialty lines insurance and reinsurance markets including U.S. excess and surplus lines and Lloyd's specialty insurance business;

•cycle-managing our portfolio towards attractive lines of business, that carry premium adequate returns while deploying capital within risk limits, diversification criteria and risk management strategy;

•investing in attractive growth markets and advancing capabilities to address more transactional specialist business targeting the lower middle market with our key distribution partners;

•leveraging our global platform to introduce our products and services to new regions including the continued expansion of our North America product capabilities;

•continuing the implementation of a more focused distribution strategy while building mutually beneficial relationships with clients and partners;

•improving the effectiveness and efficiency of our operating platforms and processes through our "How We Work" program;

•investing in data and technology, together with AI capabilities and tools, to empower our underwriters and enhance the service that we provide to our customers;

•utilizing reinsurance markets and third-party capital relationships;

•fostering a positive workplace environment that enables us to attract, retain and develop top talent; and

•leveraging our sustainability program to support and to make a positive impact on our communities.

For discussion of our results of operations and changes in financial condition for year ended December 31, 2024, compared to year ended December 31, 2023, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K, which was filed with the SEC on February 26, 2025, and such discussions are incorporated herein by reference.

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Outlook

We are executing on our commitment to advance AXIS as a specialty underwriting leader that delivers consistent, profitable growth. Our market positioning, diversified book of business, specialty underwriting acumen, global platform, claims management capabilities, and deep distribution relationships, supported by a well performing investment portfolio, provide the foundation for profitable growth in our targeted specialty markets.

The current trade and geopolitical environment introduce uncertainty across several dimensions including potential impacts on economic growth and loss costs. At AXIS, we assess all forms of uncertainty presented, and through our normal underwriting practices we take steps and measures that guard against adverse outcomes. Looking at the trends impacting our business:

•Following multiple years of rate increases outpacing loss cost trends across the specialty sector, overall pricing has moderated and in some sectors is softening. Casualty lines continue to see positive rate achievement while property rates are deteriorating due to the influx of capital being deployed in the space. We will continue to lean into sectors where premium adequacy metrics remain strong, where market dislocations arise and where organic profitable growth opportunities exist.

•The wholesale channel continues to experience submission growth in North America due to dislocations in the standard lines markets. This dynamic broadly enables specialty carriers to deploy a disciplined underwriting strategy to market opportunities.

•Overall pricing remains robust but is moderating for our reinsurance business. We continue to see nuances by line of business and expect these conditions to persist. We continue to focus on underwriting discipline and profitability.

Across the business, we will continue to pursue attractive opportunities by employing a focused underwriting strategy and selective appetite.

Where price continues to deliver adequate profitability, we will look to grow within our risk and volatility guidelines. With a strong and balanced book of business, and an expanding footprint in our chosen specialty markets, we believe AXIS remains well positioned to drive profitable growth in 2026.

Recent Developments

Loss Portfolio Transfer Reinsurance Agreement with Enstar

On December 13, 2024, we entered into a loss portfolio transfer reinsurance agreement ("LPT agreement") with Cavello Bay Reinsurance Limited, a wholly-owned subsidiary of Enstar Group Limited ("Enstar") to retrocede a portfolio of reinsurance business predominantly related to 2021 and prior underwriting years. The transaction was subject to regulatory approvals and other customary conditions.

On April 24, 2025 (the "closing date"), the LPT transaction was completed and consideration of $2,039 million was paid to Enstar.

The transaction is structured as a 75% ground-up quota share retrocession of net reserves for losses and loss expenses of approximately $2,060 million and provides cover up to a policy limit of approximately $940 million. The transaction was deemed to have met the established criteria for retroactive reinsurance accounting. Under the terms of the LPT agreement we retained responsibility for the management of claims.

Pursuant to the LPT transaction, Enstar was required to post collateral equal to 102% of our estimate of Enstar's obligations based on our estimate of net reserves for losses and loss expenses at the closing date. The collateral is provided through a collateral trust arrangement (the "LPT Trust") established by Enstar. At December 31, 2025, the balance in the LPT Trust was $1,895 million, together with a funds withheld balance of $17 million, and a letter of credit of $65 million, with the total balance of collateral securing Enstar’s obligations of $1,977 million. At December 31, 2025, the total reinsurance recoverable on unpaid losses associated with the LPT transaction was $1,755 million.

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In subsequent periods, we will reassess the reserves for losses and loss expenses subject to the LPT agreement. Any adverse prior year reserve development associated with the subject business will increase the cumulative amounts ceded to the reinsurer compared to the consideration paid and will increase the gain determined in accordance with retroactive reinsurance accounting. Consistent with our accounting policy, gains are deferred and amortized into net income over the claims settlement period.

Although retroactive reinsurance accounting may result in volatility to our results in the short-term, the LPT agreement will provide significant protection from prior year reserve development on the subject business over the contract term, provided this remains within the limit of the agreement.

Bermuda Corporate Income Tax Act of 2023

On December 27, 2023, the Bermuda government enacted the Corporate Income Tax Act 2023 (the "Act") which applies a corporate income tax of 15% for fiscal years beginning on or after January 1, 2025. The Act includes a provision referred to as the economic transition adjustment ("Bermuda ETA"), which is intended to provide a fair and equitable transition into the tax regime. Pursuant to the Act and subsequently issued guidance, the Company recorded a Bermuda ETA net deferred tax asset of $177 million in 2024.

On December 11, 2025, the Bermuda government enacted the Corporate Income Tax Amendment (No. 2) Act 2025 (the "Amendment Act") which provided technical corrections to the Act. The Amendment Act includes a provision to allow for the derecognition of deferred tax liabilities where a Bermuda tax group recognized both deferred tax assets and deferred tax liabilities under the Bermuda ETA provision. Pursuant to the Amendment Act, we released $19 million of deferred tax liabilities previously established under the Bermuda ETA provision in 2025.

While we anticipated utilizing the Bermuda ETA net deferred tax asset over a ten-year period, guidance issued by the OECD in January 2025 makes it likely that the benefit of the Bermuda ETA net deferred tax asset will only apply in 2025 and 2026. The benefit of the Bermuda ETA net deferred tax asset is excluded from operating income (loss).

Organization for Economic Cooperation and Development ("OECD") Update

On January 15, 2025, the OECD issued guidelines that limit the use of the Bermuda ETA net deferred tax asset and similar assets in other jurisdictions in which we operate under Global Anti-Base Erosion ("GLoBE") rules. The guidelines clarify the use of deferred tax assets under transition rules and limits the benefit of deferred tax assets relating to transactions that occurred after November 30, 2021. The guidelines seek to restrict the benefit of the Bermuda ETA net deferred tax asset to 20% of the balance at January 1, 2025 to be utilized in 2025 and 2026. Thereafter GLoBE rules will apply a minimum tax rate of 15% to pre-tax income generated in Bermuda by disallowing the benefit of the Bermuda ETA net deferred tax asset.

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CONSOLIDATED RESULTS OF OPERATIONS

nm – not meaningful is defined as a variance greater than +/-100%

(1)Underwriting-related general and administrative expenses is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to general and administrative expenses, the most comparable GAAP financial measure, also included corporate expenses of $116 million, $130 million, and $133 million for 2025, 2024, and 2023, respectively. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Expenses (Revenues), Net' for further details on corporate expenses. Refer also to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures Reconciliation' for further details.

(2)Consolidated underwriting income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to net income (loss), the most comparable GAAP financial measure, is presented in the table above. Refer also to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures Reconciliation' for further details.

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Underwriting Revenues

Underwriting revenues by segment were as follows:

Refer to 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Results by Segment' for further details on underwriting revenues.

Combined Ratio

The components of the combined ratio were as follows:

(1)Current accident year loss ratio, catastrophe and weather-related losses ratio and current accident year loss ratio, excluding catastrophe and weather-related losses are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K. The reconciliations to the most comparable GAAP financial measure, net losses and loss expenses ratio is provided above and a discussion of the rationale for the presentation of these items are provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures Reconciliation'.

(2)The general and administration expense ratio included corporate expenses not allocated to underwriting segments of 2.0%, 2.4% and 2.6% for 2025, 2024 and 2023, respectively. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Expenses (Revenues), Net' for further details.

Refer to 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Results by Segment' for further details on underwriting expenses.

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RESULTS BY SEGMENT

Insurance Segment

Results for the insurance segment were as follows:

nm – not meaningful

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Gross Premiums Written

Gross premiums written by line of business were as follows:

Gross premiums written in 2025 increased by $564 million, or 9% ($553 million, or 8%, on a constant currency basis(1)), compared to 2024, attributable to all lines of business with the exception of cyber lines.

The increases in professional lines, property, liability, accident and health, marine and aviation, and credit and political risk lines were driven by new business.

The increase in professional lines was also driven by a higher level of premiums associated with transactional liability business, increased rate associated with renewed environmental business, and higher renewals of program business, partially offset by reduced opportunities in Europe associated with competitive market conditions.

The increase in property lines was also due to higher renewals of program business and onshore renewable energy business, together with increased rate associated with program business, partially offset by reduced opportunities in the excess and surplus lines market associated with competitive market conditions.

The increase in liability lines was also driven by a higher level of premiums and increased rate associated with renewed U.S. excess casualty business, and higher renewals of program business, partially offset by a lower level of premiums in U.S. primary casualty business principally due to underwriting actions taken to reposition the portfolio.

The increase in accident and health lines was also attributable to a higher level of premiums and increased rate associated with renewed pet insurance business.

The decrease in cyber lines was related to the cancellation of two programs in 2024 and reduced opportunities associated with competitive market conditions, partially offset by premium adjustments related to business written on a line slip basis.

(1) Amounts presented on a constant currency basis are non-GAAP financial measures as defined in Item10 (e) of SEC Regulation S-K. The constant currency basis is calculated by applying the average foreign exchange rate from the current year to the prior year balance.

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Ceded Premiums Written

Ceded premiums written in 2025 were $2,552 million, or 36% of gross premiums written, compared to $2,365 million, or 36% in 2024. The increase in ceded premiums written of $187 million, or 8% was primarily driven by increases in accident and health, credit and political risk, professional lines, and marine and aviation lines, partially offset by decreases in property, liability, and cyber lines.

The increase in accident and health lines was attributable to a new quota share treaty covering pet insurance business effective July 2024 and the increase in gross premiums written for 2025, compared to 2024. The increases in credit and political risk, professional lines, and marine and aviation lines reflected the increases in gross premiums written for 2025, compared to 2024.

The decreases in property, and liability lines were due to the restructuring of existing quota share treaties that increased our retentions on these lines of business, partially offset by increases in gross premiums written for 2025, compared to 2024. The decrease in cyber lines reflected the decrease in gross premiums written for 2025, compared to 2024.

Net Premiums Earned

Net premiums earned by line of business were as follows:

Net premiums earned in 2025 increased by $365 million, or 9%, compared to 2024, primarily driven by an increase in gross premiums earned in property lines together with a decrease in ceded premiums earned attributable to the restructuring of an existing quota share treaty that increased our retention of property business. In addition, gross premiums earned increased in professional lines, credit and political risk, liability, and marine and aviation lines.

These increases were partially offset by a decrease in gross premiums earned in cyber lines and a decrease in net premiums earned in accident and health lines attributable to an increase in ceded premiums earned associated with the new quota share treaty covering pet insurance business, effective July 2024.

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Loss Ratio

The components of the loss ratio were as follows:

Current Accident Year Loss Ratio

The current accident year loss ratio decreased to 56.0% in 2025 from 57.6% in 2024. The decrease in the current accident year loss ratio was impacted by a lower level of catastrophe and weather-related losses.

During 2025, catastrophe and weather-related losses, net of reinsurance, were $156 million, or 3.6 points, including natural catastrophe and weather-related losses of $134 million or 3.1 points attributable to California Wildfires, Hurricane Melissa and other weather-related events. The remaining losses of $22 million, or 0.5 points were attributable to the Middle East Conflict.

Comparatively, in 2024, catastrophe and weather-related losses, net of reinsurance, were $216 million, or 5.5 points, including natural catastrophe and weather-related losses of $203 million, or 5.2 points, primarily attributable to Hurricanes Milton, Helene, and Beryl, and other weather-related events. The remaining losses of $13 million, or 0.3 points were attributable to the Red Sea Conflict.

Adjusting for the impact of the catastrophe and weather-related losses, the current accident year loss ratio of 52.4% in 2025 was comparable to 52.1% in 2024, principally due to the benefits of changes in business mix, largely offsetting the impact of rate and trend.

Prior Year Reserve Development

Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses' for details of prior year reserve development by segment, reserve class and accident year.

Acquisition Cost Ratio

The acquisition cost ratio decreased to 19.1% in 2025 from 19.5% in 2024, primarily related to an increase in ceding commissions in accident and health lines, partially offset by an increase in gross acquisition cost attributable to changes in business mix driven by the increases in credit and political risk, accident and health, and excess and surplus lines property business written in recent periods which is associated with relatively higher gross acquisition cost ratios.

Underwriting-Related General and Administrative Expense Ratio

The underwriting-related general and administrative expense ratio of 12.5% in 2025 was comparable to 12.4% in 2024, mainly driven by increases in personnel costs associated with the expansion of underwriting teams and performance-related compensation costs, together with investments in information technology, largely offset by an increase in net premiums earned.

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Reinsurance Segment

Results for the reinsurance segment were as follows:

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Gross Premiums Written:

Gross premiums written by line of business were as follows:

nm – not meaningful

Gross premiums written in 2025 increased by $75 million, or 3%, ($94 million, or 4%, on a constant currency basis) compared to 2024. The increase was primarily attributable to new business and premium adjustments.

The increase in credit and surety lines was driven by new credit and political risk business, new surety business, and a higher level of positive premium adjustments attributable to credit business, partially offset by a lower level of positive premium adjustments related to mortgage business.

The increase in liability lines was due to a higher level of positive premium adjustments, new general liability business including business at Lloyd's, new workers compensation business, the restructuring of a contract at Lloyds and the timing of renewals, partially offset by non-renewals and decreased line sizes.

The decrease in accident and health lines was driven by decreased line sizes and non-renewals attributable to increased competition and clients retaining more business, a lower level of premiums associated with a short-term medical program, and negative premium adjustments in 2025, compared to positive premium adjustments in 2024 associated with a short-term medical program.

Ceded Premiums Written

Ceded premiums written in 2025 were $971 million, or 39%, of gross premiums written, compared to $883 million, or 37%, in 2024. The increase in ceded premiums written of $87 million, or 10%, was primarily driven by increases in liability, credit and surety, motor, and agriculture lines, partially offset by a decrease in accident and health lines.

The increases in liability, credit and surety, and motor lines reflected the increase in gross premiums written in 2025, compared to 2024. The increases in liability, credit and surety, and motor lines also reflected the restructuring of quota share retrocession treaties with strategic capital partners that decreased our retentions of these lines of business. The increases in liability lines was also due to the restructuring of a quota share retrocession treaty that decreased our retention of this line of business.

The decrease in accident and health lines reflected the decrease in gross premiums written in 2025, compared to 2024.

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Net Premiums Earned

Net premiums earned by line of business were as follows:

Net premiums earned in 2025 increased by $43 million, or 3%, compared to 2024 primarily driven by an increase in gross premiums earned in credit and surety lines, partially offset by an increase in ceded premiums earned in credit and surety lines attributable to the restructuring of existing quota share treaties that decreased our retentions of this business. In addition, gross premiums earned increased in professional lines.

These increases were partially offset by decreases in gross premiums earned in run-off lines and accident and health lines.

Loss Ratio

The components of the loss ratio were as follows:

Current Accident Year Loss Ratio

The current accident year loss ratio increased to 68.3% in 2025 from 66.7% in 2024.

During 2025, catastrophe and weather-related losses, net of reinsurance, were $3 million, or 0.2 points, primarily attributable to California Wildfires.

Comparatively, in 2024, catastrophe and weather-related losses, net of reinsurance, were $10 million, or 0.7 points, primarily attributable to Hurricanes Milton and Helene and other weather-related events.

Adjusting for the impact of the catastrophe and weather-related losses, the current accident year loss ratio increased to 68.1% in 2025 from 66.0% in 2024, principally due to the impact of rate and trend, partially offset by changes in business mix.

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Prior Year Reserve Development

Refer to Item 8, Note 8 to the Consolidated Financial Statements 'Reserve for Losses and Loss Expenses' for details of prior year reserve development by segment, reserve class and accident year.

Acquisition Cost Ratio

The acquisition cost ratio of 22.2% in 2025 was comparable to 22.0% in 2024, primarily related to an increase in gross acquisition costs attributable to credit and surety, and professional lines, partially offset by lower adjustments attributable to loss-sensitive features in credit and surety lines including mortgage business, and liability lines and the benefit of retrocessional contracts driven by credit and surety, and liability lines.

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NET INVESTMENT INCOME AND NET INVESTMENT GAINS (LOSSES)

Net Investment Income

Net investment income from our cash and investment portfolio by major asset class was as follows:

nm – not meaningful

(1)Pre-tax yield is calculated by dividing net investment income by the average month-end amortized cost balances for the periods indicated.

Fixed Maturities

2025 versus 2024: Net investment income in 2025 decreased by $9 million or 1%, compared to 2024 due to the decrease in average fixed maturities principally driven by the sale and redemption of securities used to fund the consideration paid for the LPT transaction with Enstar.

Other Investments

Other investments include multi-strategy funds, direct lending funds, private equity funds, real estate funds, other privately held investments and a final distribution from CLO-Equities. These investments are recorded at fair value, with changes in fair value and income distributions reported in net investment income. The pre-tax return on other investments may vary materially year over year, particularly during volatile equity and credit markets.

Net investment income from other investments was as follows:

2025 versus 2024: Net investment income in 2025 increased by $21 million or 42%, compared to 2024 due to higher returns from direct lending funds and other privately held investments.

Mortgage Loans

2025 versus 2024: Net investment income in 2025 decreased $10 million or 31%, compared to 2024 due to loan repayments during the year.

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Net Investment Gains (Losses)

Fixed maturities classified as available for sale are reported at fair value. Realized gains (losses) on fixed maturities are reported in net investment gains (losses) when these securities are sold or impaired.

Equity securities are reported at fair value. Realized gains (losses) on equity securities are also reported in net investment gains (losses) when securities are sold or impaired. In addition, changes in the fair values of equity securities are reported in net investment gains (losses).

Changes in the fair value of investment derivatives, mainly foreign exchange forward contracts are recorded in net investment gains (losses).

Net investment gains (losses) were as follows:

(1) Related to instances where we intend to sell securities, or it is more likely than not that we will be required to sell securities before their anticipated recovery.

On Sale of Investments and Net Unrealized Gains (Losses) on Equity Securities

Generally, sales of individual securities occur when there are changes in the relative value, credit quality, or duration of a particular issue. We may also sell securities to re-balance our investment portfolio in order to change exposure to particular asset classes or sectors.

2025 versus 2024: Net investment gains in 2025 were $59 million compared to net investment losses of $139 million in 2024. Net investment gains reported in 2025 mainly reflected net realized and unrealized gains on equities, partially offset by net realized losses on the sale of corporate debt and Agency RMBS.

Net investment losses reported in 2024 mainly reflected net realized losses on the sale of corporate debt, Agency RMBS and U.S. government, partially offset by net realized and unrealized gains on equity securities.

(Increase) Decrease in Allowance for Expected Credit Losses, Fixed Maturities, Available for Sale

Refer to Item 8, Note 5(i) to the Consolidated Financial Statements 'Investments'.

(Increase) Decrease in Allowance for Expected Credit Losses, Mortgage Loans

2025 versus 2024: The allowance for expected credit losses increased by $6 million in 2025 compared to $17 million in 2024, primarily related to commercial mortgage loans exposed to the office sector. Refer to Item 8, Note 5(d) to the Consolidated Financial Statements 'Investments'.

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Impairment Losses

Refer to 'Critical Accounting Estimates – Impairment losses' for further details).

Change in Fair Value of Investment Derivatives

We economically hedge residual foreign exchange exposure with derivative contracts.

Our derivative instruments are not designated as hedges. Therefore, net unrealized gains (losses) on the hedged securities were recorded in accumulated other comprehensive income (loss) in total shareholders’ equity.

Total Return

Our investment strategy is to take a long-term view by actively managing our investment portfolio to maximize total return within certain guidelines and constraints. In assessing returns under this approach, we include net investment income, net investment gains (losses), the change in unrealized gains (losses) on fixed maturities, and interest in income (loss) of equity method investments generated by our investment portfolio.

Total return on cash and investments was as follows:

(1)Change in net unrealized gains (losses) on fixed maturities is calculated by taking net unrealized gains (losses) at year end less net unrealized gains (losses) at the prior year end.

(2)The average cash and investments balance is the average of the monthly fair value balances.

(3)Pre-tax total return on cash and investments excluding foreign exchange movements is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to pre-tax total return on cash and investments, the most comparable GAAP financial measure, included foreign exchange (losses) gains of $130 million, $(63) million and $51 million for the years ended December 31, 2025, 2024 and 2023, respectively.

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OTHER EXPENSES (REVENUES), NET

The following table provides a summary of other expenses (revenues), net:

nm – not meaningful

Corporate Expenses

Corporate expenses include holding company costs necessary to support our worldwide insurance and reinsurance operations and costs associated with operating as a publicly-traded company. As a percentage of net premiums earned, corporate expenses decreased to 2.0% in 2025 from 2.4% in 2024 due to a decrease in corporate expenses and an increase in net premiums earned. The decrease in corporate expenses in 2025 was mainly driven by a decrease in professional fees.

Foreign Exchange Losses (Gains)

Foreign exchange losses in 2025 were primarily related to the impact of the weakening of the U.S. dollar on the remeasurement of net insurance-related liabilities denominated in euro and pound sterling.

Foreign exchange gains in 2024 were primarily related to the impact of the strengthening of the U.S. dollar on the remeasurement of net insurance-related liabilities denominated in euro and Canadian dollar, partially offset by the weakening of the U.S. dollar on the remeasurement of net insurance-related liabilities denominated in pound sterling.

Interest Expense and Financing Costs

Interest expense and financing costs are related to interest due on the senior unsecured notes, junior subordinated notes and the Federal Home Loan advances ("FHLB advances") received in 2025 and 2024.

Interest expense and financing costs of $67 million in 2025 was comparable to $68 million in 2024.

Income Tax Expense (Benefit)

Income tax expense (benefit) primarily results from income (loss) generated by our global operations. Our effective tax rate, which is calculated as income tax expense (benefit) divided by income (loss) before tax including interest in income (loss) of equity method investments, was 17.7%, (5.4%), and 6.5% in 2025, 2024, and 2023, respectively. This effective rate can vary between years depending on the distribution of net income (loss) across jurisdictions, as well as other factors.

The tax expense of $217 million in 2025 was principally due to pre-tax income in our Bermuda, U.K., U.S. and European operations, partially offset by a Bermuda deferred tax benefit of $19 million associated with the write off Bermuda deferred tax liabilities, following amendments to Bermuda's Corporate Income Tax Act 2023, effective December 2025.

The tax benefit of $56 million in 2024 was principally due to the recognition of an income tax benefit of $177 million related to Bermuda corporate income tax rate of 15%, pursuant to the Corporate Income Tax Act 2023 and adjustments related to certain deferred tax assets and deferred tax liabilities that are no longer required, partially offset by pre-tax income in our U.S., U.K. and European operations.

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Valuation allowance (refer to Item 8, Note 20 to the Consolidated Financial Statements 'Income taxes').

In 2025, the valuation allowance decreased by $12 million. The net gain incurred by AXIS Re Europe, the Swiss branch of the Irish reinsurance company, resulted in the release of a valuation allowance of $8 million against the net deferred tax assets of which $4 million was released in net income (loss) and $4 million was released in other comprehensive income (loss). The remaining valuation allowance of $0.3 million was fully released against foreign tax credits held by AXIS Specialty Europe.

In 2024, the valuation allowance decreased by $19 million. The net gain incurred by AXIS Re SE, the Irish reinsurance company, resulted in the release of a valuation allowance of $13 million against the net deferred tax assets of AXIS Re SE and AXIS Re Europe, the Swiss branch of the Irish reinsurance company, of which $8 million was released to net income (loss) and $5 million was released in other comprehensive income (loss). A valuation allowance of $7 million was also released against U.S. foreign tax credits held by AXIS Specialty Europe SE.

At December 31, 2025 and 2024, the U.S. operations had a deferred tax asset of $1 million and $19 million, respectively, for the unrealized losses on its fixed maturities that were recorded in other comprehensive income (loss). We examined the need for a valuation allowance and after considering all positive and negative evidence concluded a valuation allowance against its net unrealized investment losses in the U.S was not required.

At December 31, 2025 and 2024, the Bermuda operations had a deferred tax liability of $11 million and a deferred tax asset of $17 million, respectively, for the unrealized losses on its fixed maturities that were recorded in other comprehensive income (loss). Due to the net unrealized investment gains in Bermuda, a valuation allowance was not required.

At December 31, 2025 and 2024, the Company’s Bermuda operations had a deferred tax asset of $177 million related to the Bermuda ETA. We examined the need for a valuation allowance and after considering all positive and negative evidence concluded a valuation allowance against this asset in Bermuda was not required.

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FINANCIAL MEASURES

We believe that the following financial indicators are important in evaluating performance and measuring the overall growth in value generated for common shareholders:

(1)    Return on average common equity ("ROACE") is calculated by dividing net income (loss) available (attributable) to common shareholders for the year by the average common shareholders' equity determined using the common shareholders' equity balances at the beginning and end of the year.

(2)    Operating return on average common equity ("operating ROACE"), is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to the most comparable GAAP financial measure, ROACE, and a discussion of the rationale for its presentation is provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures Reconciliation'.

(3)    Book value per diluted common share represents common shareholders’ equity divided by the number of diluted common share outstanding, determined using the treasury stock method.

Return on Average Common Equity

Our objective is to generate superior returns on capital that appropriately reward common shareholders for the risks we assume and to grow revenue only when we expect the returns will meet or exceed our requirements. We recognize that the nature of underwriting cycles and the frequency or severity of large loss events in any one year may challenge the ability to achieve a profitability target in any specific period.

The decrease in ROACE in 2025, compared to 2024, was primarily driven by an increase in average common shareholders' equity, and to a lesser extent, a decrease in net income available to common shareholders.

The decrease in operating ROACE in 2025, compared to 2024, was primarily driven by an increase in average common shareholders' equity, partially offset by an increase in operating income.

Book Value per Diluted Common Share

We consider book value per diluted common share to be an appropriate measure of returns to common shareholders, as we believe growth in book value on a diluted basis will ultimately translate into appreciation of our stock price.

In 2025, book value per diluted common share increased by 18%, driven by net income for the year, and net unrealized investment gains reported in accumulated other comprehensive income (loss), partially offset by common share repurchases, and common dividends declared.

In 2024, book value per diluted common share increased by 21%, driven by net income for the year, and net unrealized investment gains reported in accumulated other comprehensive income (loss), partially offset by common dividends declared.

Cash Dividends Declared per Common Share

We believe in returning excess capital to shareholders by way of dividends. Accordingly, dividend policy is an integral part of the value we create for shareholders. Our Board of Directors has approved quarterly common share dividends for twenty two consecutive years.

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NON-GAAP FINANCIAL MEASURES RECONCILIATION

(1)Bermuda deferred tax benefit in 2025 is due to the derecognition of deferred tax liabilities related to Bermuda corporate income tax. Bermuda deferred tax benefit in 2024 is due to the recognition of deferred tax assets net of deferred tax liabilities related to Bermuda corporate income tax.

(2)Tax expense (benefit) associated with the adjustments to net income (loss) available (attributable) to common shareholders. Tax impact is estimated by applying the statutory rates of applicable jurisdictions.

(3)Refer to Item 8, Note 14 to the Consolidated Financial Statements 'Earnings Per Common Share' for further details.

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Rationale for the Use of Non-GAAP Financial Measures

We present our results of operations in a way we believe will be meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance. Some of the measurements we use are considered non-GAAP financial measures under SEC rules and regulations. In this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), we present underwriting-related general and administrative expenses, consolidated underwriting income (loss), current accident year loss ratio, catastrophe and weather-related losses ratio, current accident year loss ratio, excluding catastrophe and weather-related losses, operating income (loss) (in total and on a per share basis), operating return on average common equity ("operating ROACE"), amounts presented on a constant currency basis and pre-tax, total return on average cash and investments excluding foreign exchange movements, which are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K. We believe that these non-GAAP financial measures, which may be defined and calculated differently by other companies, help explain and enhance the understanding of our results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Underwriting-Related General and Administrative Expenses

Underwriting-related general and administrative expenses include those general and administrative expenses that are incremental and/or directly attributable to our underwriting operations. While this measure is presented in Item 8, Note 3 to the Consolidated Financial Statements 'Segment Information', it is considered a non-GAAP financial measure when presented elsewhere on a consolidated basis.

Corporate expenses include holding company costs necessary to support our worldwide insurance and reinsurance operations and costs associated with operating as a publicly-traded company. As these costs are not incremental and/or directly attributable to our underwriting operations, these costs are excluded from underwriting-related general and administrative expenses, and therefore, consolidated underwriting income (loss). General and administrative expenses, the most comparable GAAP financial measure to underwriting-related general and administrative expenses, also includes corporate expenses.

The reconciliation of consolidated underwriting-related general and administrative expenses to general and administrative expenses, the most comparable GAAP financial measure, is presented in 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Consolidated Results of Operations'.

Consolidated Underwriting Income (Loss)

Consolidated underwriting income (loss) is a pre-tax measure of underwriting profitability that takes into account net premiums earned and other insurance related income (loss) as revenues and net losses and loss expenses, acquisition costs and underwriting-related general and administrative expenses as expenses. While this measure is presented in Item 8, Note 3 to the Consolidated Financial Statements 'Segment Information', it is considered a non-GAAP financial measure when presented elsewhere on a consolidated basis.

We evaluate our underwriting results separately from the performance of our investment portfolio. As a result, we believe it is appropriate to exclude net investment income and net investment gains (losses) from our underwriting profitability measure.

Foreign exchange losses (gains) in our consolidated statements of operations primarily relate to the impact of foreign exchange rate movements on our net insurance-related liabilities. However, we manage our investment portfolio in such a way that unrealized and realized foreign exchange losses (gains) on our investment portfolio, including unrealized foreign exchange losses (gains) on our equity securities, and foreign exchange losses (gains) realized on the sale of our available for sale investments and equity securities recognized in net investment gains (losses), and unrealized foreign exchange losses (gains) on our available for sale investments in other comprehensive income (loss), generally offset a large portion of the foreign exchange losses (gains) arising from our underwriting portfolio, thereby minimizing the impact of foreign exchange rate movements on total shareholders' equity. As a result, we believe that foreign exchange losses (gains) in our consolidated statements of operations in isolation are not a meaningful contributor to our underwriting performance. Therefore, foreign exchange losses (gains) are excluded from consolidated underwriting income (loss).

Interest expense and financing costs primarily relate to interest payable on our debt and Federal Home Loan Bank advances. As these expenses are not incremental and/or directly attributable to our underwriting operations, these expenses are excluded from underwriting-related general and administrative expenses and, therefore, consolidated underwriting income (loss).

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Reorganization expenses in 2024 primarily related to severance costs attributable to our "How We Work" program. Reorganization expenses in 2023 primarily related to impairments of computer software assets and severance costs attributable to our "How We Work" program which is focused on simplifying our operating structure. Reorganization expenses are primarily driven by business decisions, the nature and timing of which are not related to the underwriting process. Therefore, these expenses are excluded from consolidated underwriting income (loss).

Amortization of intangible assets arose from business decisions, the nature and timing of which are not related to the underwriting process. Therefore, these expenses are excluded from consolidated underwriting income (loss).

We believe that the presentation of underwriting-related general and administrative expenses and consolidated underwriting income (loss) provides investors with an enhanced understanding of our results of operations, by highlighting the underlying pre-tax profitability of our underwriting activities. The reconciliation of consolidated underwriting income (loss) to net income (loss), the most comparable GAAP financial measure, is presented in 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Consolidated Results of Operations'.

Current Accident Year Loss Ratio

Current accident year loss ratio represents net losses and loss expenses ratio exclusive of net favorable (adverse) prior year reserve development. We believe that the presentation of current accident year loss ratio provides investors with an enhanced understanding of our results of operations by highlighting net losses and loss expenses associated with our underwriting activities excluding the impact of volatile prior year reserve development. The reconciliation of current accident year loss ratio to net losses and loss expenses ratio, the most comparable GAAP financial measure, is presented in 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Consolidated Results of Operations'.

Catastrophe and Weather-Related Losses Ratio and Current Accident Year Loss Ratio, excluding Catastrophe and Weather-Related Losses

Catastrophe and weather-related losses ratio represents net losses and loss expenses ratio associated with natural catastrophes, man-made disasters, other significant catastrophe events and other weather-related events exclusive of net favorable (adverse) prior year reserve development.

Current accident year loss ratio, excluding catastrophe and weather-related losses represents net losses and loss expenses ratio exclusive of net favorable (adverse) prior year reserve development and net losses and loss expenses associated with natural catastrophes, man-made disasters, other significant catastrophe events and other weather-related events.

We believe that the presentation of these ratios that separately identify net losses and loss expenses associated with catastrophe and weather-related events provide investors with an enhanced understanding of our results of operations due to the inherently unpredictable nature of the occurrence of these events, the potential magnitude of these losses and the complexity that affects our ability to accurately estimate ultimate losses associated with these events.

The reconciliation of catastrophe and weather-related losses ratio and current accident year loss ratio, excluding catastrophe and weather-related losses to net losses and loss expenses ratio, the most comparable GAAP financial measure, is presented in 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Consolidated Results of Operations'.

Operating Income (Loss)

Operating income (loss) represents after-tax operational results exclusive of net investment gains (losses), foreign exchange losses (gains), reorganization expenses, interest in income (loss) of equity method investments and Bermuda deferred tax asset.

Although the investment of premiums to generate income and investment gains (losses) is an integral part of our operations, the determination to realize investment gains (losses) is independent of the underwriting process and is heavily influenced by the availability of market opportunities. Furthermore, many users believe that the timing of the realization of investment gains (losses) is somewhat opportunistic for many companies.

Foreign exchange losses (gains) in our consolidated statements of operations primarily relate to the impact of foreign exchange rate movements on net insurance-related liabilities. However, we manage our investment portfolio in such a way that unrealized and realized foreign exchange losses (gains) on our investment portfolio, including unrealized foreign exchange losses (gains) on our equity securities and foreign exchange losses (gains) realized on the sale of our available for sale investments and equity securities recognized in net investment gains (losses) and unrealized foreign exchange losses

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(gains) on our available for sale investments in other comprehensive income (loss), generally offset a large portion of the foreign exchange losses (gains) arising from our underwriting portfolio, thereby minimizing the impact of foreign exchange rate movements on total shareholders' equity. As a result, we believe that foreign exchange losses (gains) in our consolidated statements of operations in isolation are not a meaningful contributor to the performance of our business. Therefore, foreign exchange losses (gains) are excluded from operating income (loss).

Reorganization expenses in 2024 primarily related to severance costs attributable to our "How We Work" program. Reorganization expenses in 2023 primarily related to impairments of computer software assets and severance costs attributable to our "How We Work" program which is focused on simplifying our operating structure. Reorganization expenses are primarily driven by business decisions, the nature and timing of which are not related to the underwriting process. Therefore, these expenses are excluded from operating income (loss).

Interest in income (loss) of equity method investments is primarily driven by business decisions, the nature and timing of which are not related to the underwriting process. Therefore, this income (loss) is excluded from operating income (loss).

Bermuda deferred tax benefit in 2025 is due to the derecognition of deferred tax liabilities related to Bermuda corporate income tax, pursuant to the Corporate Income Tax Act amendment (No. 2) 2025 that is effective December 11, 2025. Bermuda deferred tax benefit in 2024 is due to the recognition of deferred tax assets net of deferred tax liabilities, pursuant to the Corporate Income Tax Act 2023 that is effective for fiscal years beginning on or after January 1, 2025. Bermuda deferred tax benefits are not related to the underwriting process. Therefore, this income is excluded from operating income (loss).

Certain users of our financial statements evaluate performance exclusive of after-tax net investment gains (losses), foreign exchange losses (gains), reorganization expenses, interest in income (loss) of equity method investments and Bermuda deferred tax asset in order to understand the profitability of recurring sources of income.

We believe that showing net income (loss) available (attributable) to common shareholders exclusive of after-tax net investment gains (losses), foreign exchange losses (gains), reorganization expenses, interest in income (loss) of equity method investments and Bermuda deferred tax asset reflects the underlying fundamentals of our business. In addition, we believe that this presentation enables investors and other users of our financial information to analyze performance in a manner similar to how our management analyzes the underlying business performance. We also believe this measure follows industry practice and, therefore, facilitates comparison of our performance with our peer group. We believe that equity analysts and certain rating agencies that follow us, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons. The reconciliation of operating income (loss) to net income (loss) available (attributable) to common shareholders, the most comparable GAAP financial measure, is presented above.

We also present operating income (loss) per diluted common share and operating ROACE, which are derived from the operating income (loss) measure and are reconciled above to the most comparable GAAP financial measures, earnings (loss) per diluted common share and return on average common equity ("ROACE"), respectively.

Constant Currency Basis

We present gross premiums written and net premiums earned on a constant currency basis in this MD&A. The amounts presented on a constant currency basis are calculated by applying the average foreign exchange rate from the current year to the prior year amounts. We believe this presentation enables investors and other users of our financial information to analyze growth in gross premiums written and net premiums earned on a constant basis. The reconciliation to gross premiums written and net premiums earned on a GAAP basis is presented in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results by Segment'.

Pre-Tax, Total Return on Average Cash and Investments excluding Foreign Exchange Movements

Pre-tax, total return on average cash and investments excluding foreign exchange movements measures net investment income (loss), net investment gains (losses), interest in income (loss) of equity method investments, and change in unrealized gains (losses) generated by average cash and investment balances. We believe this presentation enables investors and other users of our financial information to analyze the performance of our investment portfolio. The reconciliation of pre-tax, total return on average cash and investments excluding foreign exchange movements to pre-tax, total return on average cash and investments, the most comparable GAAP financial measure, is presented in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Net Investment Income and Net Investment Gains (Losses)'.

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CASH AND INVESTMENTS

Details of cash and investments are as follows:

(1)Presented at net carrying value of $397 million (2024: $443 million) in the consolidated balance sheets.

(2)Includes restricted cash and cash equivalents of $501 million and $920 million for 2025 and 2024, respectively.

Overview

The fair value of total investments increased by $718 million in 2025, driven by the reinvestment of interest income and income from operations, and the increase in market value of fixed maturities due to the decline in yields.

Cash and Cash equivalents

At December 31, 2025, cash and cash equivalents were $1.3 billion compared to $3.1 billion at December 31, 2024, a decrease of $1.7 billion. Cash and cash equivalents at December 31, 2024 were higher than usual in anticipation of premiums to be paid for the LPT agreement on receipt of regulatory approval.

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An analysis of our investment portfolio by asset class is detailed below:

Fixed Maturities

Details of our fixed maturities portfolio are as follows:

(1)Includes bonds issued by states, municipalities, and political subdivisions.

(2)Includes U.S. government-sponsored agencies, residential mortgage-backed securities ("RMBS") and commercial mortgage-backed securities ("CMBS").

(3)Non-investment grade and non-rated securities.

At December 31, 2025, fixed maturities had a weighted average credit rating of A+ (2024: A+), a book yield of 4.6% (2024: 4.5%), and an average duration of 3.1 years (2024: 2.8 years).

At December 31, 2025, fixed maturities together with short-term investments, and cash and cash equivalents (i.e., total investments of $14.8 billion) had a weighted average credit rating of AA- (2024: AA-) and an average duration of 2.8 years (2024: 2.5 years).

Our methodology for assigning credit ratings to fixed maturities is in line with the methodology used for the Barclays U.S. Aggregate Bond index. This methodology uses the midpoint of Standard & Poor's (S&P), Moody's and Fitch ratings. When ratings from only two of these agencies are available, the lower rating is used. When only one agency rates a security, that rating is used. When ratings provided by S&P, Moody's and Fitch are not available, ratings from other nationally recognized agencies are used.

To calculate the weighted average credit rating for fixed maturities, we assign points to each rating with the highest points assigned to the highest rating (AAA) and the lowest points assigned to the lowest rating (D) and then calculate the weighted average based on the fair values of the individual securities. Securities that are not rated are excluded from weighted average calculations. At December 31, 2025, the fair value of fixed maturities not rated was $1 million (2024: $3 million).

In addition to managing credit risk exposure within our fixed maturities portfolio, we also monitor the aggregation of country risk exposure on a group-wide basis. Country risk exposure is the risk that events in a country, such as currency crises, regulatory changes and other political events, will adversely affect the ability of obligors in the country to honor their obligations. For corporate debt and structured securities, we measure the country of risk exposure based on a number of factors, including but not limited to location of management, principal operations and country of revenues.

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An analysis of our fixed maturities portfolio by major asset classes is detailed below:

Non-U.S. Government

Non-U.S. government securities include bonds issued by non-U.S. governments and their agencies along with supranational organizations (collectively also known as sovereign debt securities).

Details of exposures to governments in the eurozone and other non-U.S. government concentrations by fair value are as follows:

(1)Includes supranationals only in the eurozone.

At December 31, 2025, net unrealized losses on non-U.S. government securities were $12 million (2024: $23 million) which included gross unrealized foreign exchange losses of $1 million (2024: $19 million), mainly related to Canada and U.K. government bonds.

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Corporate Debt

Corporate debt securities consist primarily of investment grade debt of a wide variety of corporate issuers and industries.

Details of our corporate debt securities portfolio by sector are as follows:

At December 31, 2025, our non-investment grade portfolio had a fair value of $1,562 million (2024: $1,480 million), a weighted average credit rating of B+ (2024: B+) and duration of 1.8 years (2024: 2.2 years). At December 31, 2025, our corporate debt portfolio, including non-investment grade securities, had a duration of 3.2 years (2024: 3.2 years).

Mortgage-Backed Securities

Details of the fair values of our RMBS and CMBS portfolios by credit rating are as follows:

(1)Non-investment grade securities and non-rated securities.

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Residential MBS

Agency RMBS consist of bonds issued by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association, which are primarily AA+ rated and are supported by loans which are diversified across geographical areas. At December 31, 2025, agency RMBS had an average duration of 5.2 years (2024: 5.2 years).

Non-agency RMBS mainly include investment grade bonds originated by non-agencies. At December 31, 2025, 99% (2024: 98%) of our non-agency RMBS were rated AA or better. At December 31, 2025, non-agency RMBS had an average duration of 3.5 years (2024: 4.3 years) and weighted average life of 2.3 years (2024: 5.4 years).

Commercial MBS

CMBS mainly include investment grade bonds originated by non-agencies. At December 31, 2025, 98% (2024: 99%) of our CMBS were rated AA or better. At December 31, 2025, the weighted average estimated subordination percentage of the portfolio was 32% (2024: 34%), which represents the current weighted average estimated percentage of the capital structure subordinated to the investment holding that is available to absorb losses before the security incurs the first dollar loss of principal. At December 31, 2025, CMBS had an average duration of 2.7 years (2024: 2.7 years) and weighted average life of 3.3 years (2024: 3.7 years).

Asset-Backed Securities

ABS mainly include investment grade bonds backed by pools of loans with a variety of underlying collateral, including auto loans, student loans, credit card receivables and collateralized loan obligations ("CLOs") originated by a variety of financial institutions.

Details of the fair value of our ABS portfolio by underlying collateral and credit rating are as follows:

At December 31, 2025, the average duration of our ABS portfolio was 1.1 years (2024: 1.0 year) and the weighted average life was 3.8 years (2024: 3.1 years).

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Municipals

Municipals comprise revenue bonds and general obligation bonds issued by U.S. domiciled state and municipal entities and are primarily held in the taxable portfolios of our U.S. subsidiaries.

At December 31, 2025, our municipals had a fair value of $52 million (2024: $111 million), a weighted average credit rating of AA- (2024: AA-) and duration of 3.7 years (2024: 3.3 years).

Gross Unrealized Losses

At December 31, 2025, the gross unrealized losses on our fixed maturities, available for sale portfolio were $99 million (2024: $311 million).

Investment grade fixed maturities, available for sale

The severity of the unrealized loss position as a percentage of amortized cost for all investment grade fixed maturities in an unrealized loss position including any impact of foreign exchange losses (gains) was as follows:

The decrease in gross unrealized losses on investment grade fixed maturities primarily reflected the impact of the decline in yields and the tightening of credit spreads on investment grade corporate debt securities.

Non-investment grade fixed maturities, available for sale

The severity of the unrealized loss position as a percentage of amortized cost for all non-investment grade fixed maturities in an unrealized loss position including any impact of foreign exchange losses (gains) was as follows:

The decrease in gross unrealized losses on non-investment grade fixed maturities reflected the impact of the tightening of credit spreads on non-investment grade high yield corporate debt securities.

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