66 added · 80 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
The following table reflects the impact on our recorded reserves of increasing the frequency and severity assumptions in the ultimate commercial automobile liability losses on the three most recent accident years: (In millions, except frequency and severity assumptions) Severity Frequency 2.5% 5.0% 7.5% —% $ 50 $ 90 $ 140 1.0% 70 110 160 2.0% 90 130 180 25 Table of Contents Given the factors described above, it is not possible to quantify precisely the ultimate exposure represented by claims and related litigation.
Further information on our fair value measurements is in Note C to the Consolidated Financial Statements included under Item 8. 20 Table of Contents Our fixed maturity securities are subject to market declines below amortized cost that may result in the recognition of impairment losses in earnings.
Industry and General Market Factors • general economic and business conditions, including potential recessionary conditions that may decrease the size and number of our insurance customers and create losses in our lines of business, and inflationary pressures on medical care costs, construction costs and other economic sectors; • the effect of new tariffs and changes in tariffs, as well as significant uncertainty surrounding U.S. tariff policy generally, and any retaliatory tariffs, may adversely impact the economic environment, inflation expectations and certain loss costs, and may result in decreases in the size and number of our insurance customers; • the effects of social inflation, including frequency of nuclear verdicts and increased litigation activity, on the severity of claims; • the effects on the frequency of claims of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual abuse; 49 Table of Contents • the impact of competitive products, policies and pricing and the competitive environment in which we operate, including changes in our book of business; • product and policy availability and demand and market responses, including the level of ability to obtain rate increases; • conditions in the capital and credit markets, including uncertainty and instability in these markets, as well as the overall economy, and their impact on the returns, types, liquidity and valuation of our investments; • conditions in the capital and credit markets that may limit our ability to raise significant amounts of capital on favorable terms or at all; and • the possibility of changes in our ratings by ratings agencies, including the inability to access certain markets or distribution channels and the required collateralization of future payment obligations as a result of such changes, and changes in rating agency policies and practices.
Regulatory, Legal and Operational Factors • regulatory and legal initiatives and compliance with governmental regulations and other legal requirements, which are increasing in complexity and number, change frequently, sometimes conflict, and could expose us to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions, including regulations related to cybersecurity protocols (which continue to evolve in breadth, sophistication and maturity in response to an ever-evolving threat landscape) or utilization of artificial intelligence (AI), legal inquiries by state authorities, judicial interpretations within the regulatory framework, including interpretation of policy provisions, decisions regarding coverage and theories of liability, legislative actions that increase claimant activity, including those revising applicability of statutes of limitations, trends in litigation and the outcome of any litigation involving us and rulings and changes in tax laws and regulations; • regulatory limitations, impositions and restrictions upon us, including with respect to our ability to increase premium rates, and the effects of assessments and other surcharges for guaranty funds and second-injury funds, other mandatory pooling arrangements and future assessments levied on insurance companies; • regulatory limitations and restrictions, including limitations upon our ability to receive dividends from our insurance subsidiaries, imposed by regulatory authorities, including regulatory capital adequacy standards; • additional complexities and greater risk to the effectiveness of controls with the incorporation of AI into our and our third-party service providers' operations, including the possibility of inaccurate or biased outputs, degradation in model performance, unauthorized use or disclosure of data used to train AI models, and the potential for AI to be misused to perpetrate fraud or evade monitoring controls; and • breaches of our or our vendors' data security infrastructure resulting in unauthorized access to systems and information, and/or interruption of operations.
Impact of Natural and Man-Made Disasters and Mass Tort Claims • weather and other natural physical events, including the severity and frequency of storms, hail, snowfall and other winter conditions, natural disasters such as hurricanes, tornados and earthquakes, as well as climate change, including effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels, wildfires, rain, hail and snow; • regulatory requirements imposed by coastal state regulators in the wake of hurricanes or other natural disasters, including limitations on the ability to exit markets or to non-renew, cancel or change terms and conditions in policies, as well as mandatory assessments to fund any shortfalls arising from the inability of quasi-governmental insurers to pay claims; • man-made disasters, including the possible occurrence of terrorist attacks, the unpredictability of the nature, targets, severity or frequency of such events, and the effect of the absence or insufficiency of applicable terrorism legislation on coverages; • the occurrence of epidemics and pandemics; and • mass tort claims, including those related to exposure to potentially harmful products or substances such as glyphosate, lead paint, per- and polyfluoroalkyl substances (PFAS) and opioids, sexual abuse and molestation claims and claims arising from changes in statutes of limitation and other changes that repeal or weaken tort reforms. 50 Table of Contents Our forward-looking statements speak only as of the date of the filing of this Annual Report on Form 10-K and we do not undertake any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date of the filing of this Annual Report on Form 10-K, even if our expectations or any related events or circumstances change. 51 Table of Contents ITEM 7A.
The following table reflects the impact on our recorded reserves (which could be favorable or unfavorable) of changing the ultimate losses by one percentage point in the long-tail development: As of December 31, 2025 Impact Recorded Reserve (In billions) Amount (+/-) (In millions) Percent (+/-) Medical Professional Liability $ 1.5 $ 120 8.0 % Other Professional Liability and Management Liability 4.1 240 6.0 General Liability 4.8 280 6.0 Workers' compensation also requires considerable judgment given its long development pattern and the impacts of medical inflation, the cost of wage replacement, expected claimant lifetimes, judicial decisions, legislative changes and other factors.
Adjusting the ultimate losses by one percentage point change in the long-tail development would increase or decrease the recorded reserve of $3.5 billion as of December 31, 2025 by approximately $240 million, or 7% of the recorded reserves.
Core income decreased $57 million in 2025 as compared with 2024 primarily due to unfavorable net prior year loss reserve development in 2025 compared with favorable net prior year loss reserve development in 2024 and lower underlying underwriting results partially offset by higher net investment income.
Catastrophe losses were $217 million, or 3.8 points of the loss ratio, for 2025, as compared with $318 million, or 6.2 points of the loss ratio, for 2024. 37 Table of Contents Unfavorable net prior year loss reserve development of $39 million was recorded in 2025 compared with $16 million of favorable net prior year loss reserve development recorded in 2024.
Core income increased $54 million in 2025 as compared with 2024 driven by higher net investment income, a favorable impact from changes in foreign currency exchange rates, higher favorable net prior year loss reserve development and lower catastrophe losses.
Years ended December 31 (In millions) 2025 2024 Net investment income $ 62 $ 67 Insurance claims and policyholders' benefits 201 106 Interest expense 135 133 Core loss (278) (210) 2025 Compared with 2024 Core loss increased $68 million for 2025 as compared with 2024. 2025 includes a $106 million after-tax charge related to unfavorable net prior year loss reserve development largely associated with legacy mass tort abuse reserves compared with a $62 million after-tax charge in 2024.
Government, Government agencies and Government-sponsored enterprises $ 3,274 $ (228) $ 2,936 $ (369) AAA 3,997 (136) 3,010 (217) AA 7,001 (428) 6,369 (567) A 11,167 (140) 10,260 (379) BBB 16,249 (223) 16,757 (729) Non-investment grade 1,714 (42) 1,779 (64) Total $ 43,402 $ (1,197) $ 41,111 $ (2,325) As of December 31, 2025 and 2024, 1% of our fixed maturity portfolio was rated internally.
No longer disclosed
An allowance for uncollectible insurance receivables is recorded on the basis of periodic 21 Table of Contents evaluations of balances due from insureds, currently as well as in the future, historical business default data, management's experience and current and forecast economic conditions.
Industry and General Market Factors • general economic and business conditions, including recessionary conditions that may decrease the size and number of our insurance customers and create losses in our lines of business, and inflationary pressures (including with respect to the imposition of significant tariffs and any related retaliatory tariffs) on medical care costs, construction costs and other economic sectors; • the effects of social inflation, including frequency of nuclear verdicts and increased litigation activity, on the severity of claims; • the effects on the frequency of claims of reviver statutes that extend, or eliminate, the statute of limitations for the reporting of claims, including statutes passed in certain states with respect to sexual molestation and sexual abuse; • the impact of comp
The increase in the expense ratio was driven by higher employee related costs and a favorable reinsurance acquisition related catch-up adjustment recorded in the prior year, partially offset by higher net earned premiums.
As of September 30, 2024, statutory long-term care margin increased to $1.4 billion from $1.3 billion, primarily driven by a more favorable interest rate environment resulting in a higher yielding investment portfolio. 28 Table of Contents CATASTROPHES AND RELATED REINSURANCE Various events can cause catastrophe losses.
Years ended December 31 (In millions) 2024 2023 Net investment income $ 67 $ 62 Insurance claims and policyholders' benefits 106 82 Interest expense 133 126 Core loss (210) (173) 2024 Compared with 2023 Core loss increased $37 million for 2024 as compared with 2023.
Government, Government agencies and Government-sponsored enterprises $ 2,936 $ (369) $ 2,795 $ (298) AAA 3,010 (217) 2,727 (169) AA 6,369 (567) 6,444 (420) A 10,260 (379) 9,910 (223) BBB 16,757 (729) 16,670 (744) Non-investment grade 1,779 (64) 1,879 (119) Total $ 41,111 $ (2,325) $ 40,425 $ (1,973) As of December 31, 2024 and 2023, 1% of our fixed maturity portfolio was rated internally.
December 31, 2024 (In millions) Estimated Fair Value Gross Unrealized Losses Due in one year or less $ 1,390 $ 16 Due after one year through five years 7,731 366 Due after five years through ten years 7,762 910 Due after ten years 10,455 1,748 Total $ 27,338 $ 3,040 44 Table of Contents Commercial Real Estate Our investment portfolio has exposure to the commercial real estate sector primarily through our fixed maturity securities and mortgage loan portfolios.
December 31, 2024 December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses) Commercial mortgage-backed: Single asset, single borrower: Office $ 339 $ (43) $ 306 $ (70) Lodging 271 (8) 227 (23) Retail 268 (10) 283 (28) Multifamily 50 (1) 59 (3) Industrial 42 (3) 93 (4) Total single asset, single borrower 970 (65) 968 (128) Conduits (multi property, multi borrower pools) 711 (66) 663 (95) Total commercial mortgage-backed $ 1,681 $ (131) $ 1,631 $ (223) December 31, 2024 December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses) Commercial mortgage-backed: AAA $ 736 $ (14) $ 570 $ (27) AA 609 (60) 594 (95) A 163 (20) 202 (30) BBB 139 (20) 216 (45) Non-investment grade 34 (17) 49 (26) Total commercial mortgage-backed $ 1,681 $ (131) $ 1,631 $ (223) 45 Table of Contents The following tables present the estimated fair value and net unrealized gains (losses) of the REIT issuer exposure within our corporate and other bonds portfolio by property type and by ratings distribution.
December 31, 2024 December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses) Corporate and other bonds - REITs: Retail $ 478 $ (18) $ 515 $ (25) Office 239 (12) 250 (20) Self-Storage 98 (5) 85 (6) Industrial 93 (3) 99 (1) Other (1) 387 (10) 367 (16) Total corporate and other bonds - REITs $ 1,295 $ (48) $ 1,316 $ (68) (1) Other includes a diversified mix of property type strategies including healthcare and apartments.
December 31, 2024 December 31, 2023 (In millions) Estimated Fair Value Net Unrealized Gains (Losses) Estimated Fair Value Net Unrealized Gains (Losses) Corporate and other bonds - REITs: AA $ 6 $ — $ 10 $ — A 310 (6) 285 (3) BBB 942 (40) 994 (64) Non-investment grade 37 (2) 27 (1) Total corporate and other bonds - REITs $ 1,295 $ (48) $ 1,316 $ (68) Mortgage loans are commercial in nature and are carried at unpaid principal balance, net of unamortized fees and an allowance for expected credit losses.
December 31, 2024 December 31, 2023 (In millions) Amortized Cost Percentage of Total Amortized Cost Percentage of Total Mortgage loans: Retail $ 527 50 % $ 520 48 % Office 239 22 % 245 23 % Industrial 123 12 % 124 12 % Other 165 16 % 181 17 % Total mortgage loans 1,054 100 % 1,070 100 % Less: Allowance for expected credit losses (35) (35) Total mortgage loans - net of allowance $ 1,019 $ 1,035 46 Table of Contents In addition to our mortgage loan portfolio, we invest in securitized credit tenant loans and ground lease financings that are classified as fixed maturity securities and are largely investment grade quality.
December 31, 2024 (In millions) Total Less than 1 year 1-3 years 3-5 years More than 5 years Debt (1) $ 3,712 $ 123 $ 1,211 $ 656 $ 1,722 Lease obligations (2) 293 43 67 59 124 Claim and claim adjustment expense reserves (3) 25,524 5,737 6,977 3,944 8,866 Future policy benefit reserves (4) 27,028 801 1,570 1,738 22,919 Total (5) $ 56,557 $ 6,704 $ 9,825 $ 6,397 $ 33,631 (1) Includes estimated future interest payments.