AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Evidence
Excluding the surety line of business, for which the following are not relevant measures, retention rates remained strong in the third quarter and first nine months of 2026 and increased over the same periods of 2025.
MD&A / reported retention excluding surety · Filed 16/10/2026
•Middle Market provides mid-sized businesses with property and casualty insurance products and services, including commercial multi-peril, general liability, commercial automobile, workers’ compensation and commercial property, as well as risk management, claims handling and other services.
Business / Middle Market products and services · Filed 12/02/2026
In the independent agent channel, Personal Insurance competes for business within each independent agency since these agencies also offer policies from competing companies.
Business / Personal Insurance agency competition · Filed 12/02/2026
Because the use of this technology facilitates the process of generating multiple quotes, the technology has increased price comparison on new and renewal business.
Business / observed effect of comparative rating · Filed 12/02/2026
Similarly, comparative rating technology has impacted competition in personal lines and is now being used to access comparative rates for small commercial business as well, and that trend is likely to continue and may accelerate.
Risk factors / comparative rating in small commercial · Filed 12/02/2026
The property and casualty insurance industry is highly competitive in the areas of price, service, product offerings, agent and broker relationships and other methods of distribution.
Business / industry competition · Filed 12/02/2026
Renewal premium changes in the third quarter and first nine months of 2026 remained positive but were slightly lower than the same periods of 2025.
MD&A / reported renewal premium changes · Filed 16/10/2026
When business renews, the amount of net written premiums associated with that business may increase or decrease (renewal premium change) as a result of increases or decreases in rate and/or insured exposures, which the Company considers as a measure of units of exposure (such as the number and value of vehicles or properties insured).
MD&A / renewal premium change definition · Filed 17/07/2026
The Company’s ability to increase rates and the relative timing of the process are dependent upon each respective state’s requirements, as well as the competitive market environment.
Business / rate-setting constraints · Filed 12/02/2026
These underwriting actions on new and existing business include tightening underwriting standards, selective price increases and changes to policy terms specific to hurricane-, tornado-, wind-, wildfire- and hail-prone areas.
Business / implemented underwriting and pricing actions · Filed 12/02/2026
Net income of $2.21 billion in the second quarter of 2026 increased by 46% over net income of $1.51 billion in the same period of 2025.
MD&A / second-quarter consolidated net income · Filed 17/07/2026
The increase in income before income taxes in the second quarter of 2026 primarily reflected the pre-tax impacts of (i) lower catastrophe losses, (ii) higher net favorable prior year reserve development, (iii) higher net investment income, (iv) higher net realized investment gains and (v) higher underwriting margins excluding catastrophe losses and prior year reserve development (“underlying underwriting margins”).
MD&A / sources of second-quarter earnings improvement · Filed 17/07/2026
During the three and nine months ended September 30, 2026, the Company repurchased 4.0 million and 14.3 million common shares, respectively, under its share repurchase authorizations for total cost of $1.50 billion and $4.60 billion, respectively.
Notes / actual 2026 share repurchases · Filed 16/10/2026
•Total capital returned to shareholders of $1.77 billion, comprising $1.51 billion of share repurchases and $261 million of dividends
MD&A / third-quarter capital returned · Filed 16/10/2026
•Holding company liquidity of $3.17 billion
MD&A / holding-company liquidity · Filed 16/10/2026
Credit Agreement. On May 15, 2026, the Company entered into a five-year $1.2 billion revolving credit agreement with a syndicate of financial institutions, replacing its existing five-year $1.0 billion revolving credit agreement, which was terminated on May 15, 2026.
Notes / revolving credit agreement · Filed 16/10/2026
As of September 30, 2026, the Company was in compliance with these covenants.
Notes / credit covenant compliance · Filed 16/10/2026
Debt Repayment. On April 15, 2026, the Company’s $200 million, 7.75% senior notes matured and were fully paid.
Notes / debt maturity repayment · Filed 16/10/2026
Debt Issuance. On July 24, 2026, the Company issued $750 million aggregate principal amount of 4.95% senior notes that will mature on July 24, 2031.
Notes / senior debt issuance and coupon · Filed 16/10/2026
The total compensation cost for all share-based incentive compensation awards recognized in earnings was $62 million and $59 million for the three months ended September 30, 2026 and 2025, respectively, and $210 million and $199 million for the nine months ended September 30, 2026 and 2025, respectively.
Notes / recognized share-based compensation cost · Filed 16/10/2026
The total unrecognized compensation cost related to all nonvested share-based incentive compensation awards as of September 30, 2026 was $314 million, which is expected to be recognized over a weighted-average period of 1.8 years.
Notes / unrecognized share-based compensation commitments · Filed 16/10/2026
The Company has a policy of issuing new shares to settle the exercise of stock option awards under the various settlement alternatives allowed under the 2023 Incentive Plan, and the vesting of other equity awards.
Notes / new-share settlement policy · Filed 12/02/2026
•Total investments of $100.59 billion; fixed maturities and short-term securities comprised 94% of total investments
MD&A / investment portfolio composition · Filed 16/10/2026
•Net unrealized investment losses of $8.05 billion ($6.35 billion after-tax)
MD&A / third-quarter unrealized investment losses · Filed 16/10/2026
•Net unrealized investment losses of $2.48 billion ($1.96 billion after-tax)
MD&A / second-quarter unrealized investment losses · Filed 17/07/2026
Over the past decade, the property and casualty insurance industry, including the Company, has experienced net unfavorable prior year reserve development with regard to asbestos reserves, but the Company believes that over that period there has been a reduction in the volatility associated with the Company’s overall asbestos exposure as the overall asbestos environment has evolved from one dominated by exposure to significant litigation risks, particularly coverage disputes relating to policyholders in bankruptcy who were asserting that their claims were not subject to the aggregate limits contained in their policies, to an environment primarily driven by a frequency of litigation related to individuals with mesothelioma.
MD&A / realized asbestos reserve development history · Filed 17/07/2026
Significant collateral, primarily letters of credit and, to a lesser extent, cash collateral, trusts or surety bonds, is generally obtained for large deductible plans and/or retrospectively rated policies that provide for deferred collection of deductible recoveries and/or ultimate premiums.
Business / collateral for deductible and retrospective exposures · Filed 12/02/2026
Reinsurance treaties often have aggregate limits or caps which may result in larger net per-risk retentions if the aggregate limits or caps are reached.
Business / reinsurance aggregate limits · Filed 12/02/2026
Additionally, in response to international efforts to establish capital standards on a groupwide basis, the NAIC adopted changes to its Model Holding Company Act to require certain insurance groups to file a Group Capital Calculation to allow the groupwide supervisor (lead state) to evaluate the risks and available capital on a groupwide basis in addition to the risk-based capital requirements currently imposed on a legal-entity basis.
Regulation / group capital calculation and legal-entity RBC · Filed 12/02/2026
The Connecticut insurance holding company laws require notice to, and approval by, the state insurance commissioner for the declaration or payment of any dividend from an insurance subsidiary that, together with other distributions made within the preceding twelve months, exceeds the greater of 10% of the insurance subsidiary’s statutory capital and surplus as of the preceding December 31st, or the insurance subsidiary’s net income for the twelve-month period ending the preceding December 31st, in each case determined in accordance with the statutory accounting practices prescribed or permitted by the State of Connecticut Insurance Department.
Regulation / subsidiary dividend approval threshold · Filed 12/02/2026
The sale closed on January 2, 2026.
Business / Canadian disposition closing · Filed 12/02/2026
On May 27, 2025, the Company entered into an agreement to sell its Canadian personal insurance business and the majority of its Canadian commercial insurance business to Definity Financial Corporation for approximately US$2.4 billion.
Business / Canadian disposition agreement · Filed 12/02/2026
•Majority voting standard for director elections
Proxy / director election voting standard · Filed 07/04/2026
Todd C. Schermerhorn currently serves as our
Proxy / independent lead director · Filed 07/04/2026
•the Board has determined for the time being that combining the roles of Chairman and Chief Executive Officer
Proxy / combined chairman and CEO roles · Filed 07/04/2026
the three calendar years in the performance period.
Proxy / three-year performance measurement · Filed 07/04/2026
on Equity of 9.95% will yield a vesting of 70%).
Proxy / performance-dependent vesting example · Filed 07/04/2026
relative total shareholder return. This modifier adjusts
Proxy / relative shareholder return payout modifier · Filed 07/04/2026
a restatement of Company financial results.
Proxy / compensation recovery circumstances · Filed 07/04/2026
Pursuant to the credit agreement covenants, the Company must maintain an excess of consolidated net worth, defined as shareholders’ equity determined in accordance with GAAP (excluding accumulated other comprehensive income (loss)) plus (a) trust preferred securities (not to exceed 15% of total capital) and (b) mandatorily convertible securities (combined with trust preferred securities, not to exceed 25% of total capital), over goodwill and other intangible assets.
Notes / contractual net-worth definition · Filed 16/10/2026
The minimum consolidated net worth requirement is fixed during the term of the credit agreement at an amount equal to $17.8 billion (57.5% of the Company’s net worth as defined above as of March 31, 2026).
Notes / contractual minimum net worth · Filed 16/10/2026
The Company expects that, generally over time, the combination of dividends to common shareholders and common share repurchases will likely not exceed net income.
MD&A / expected distributions relative to income · Filed 16/10/2026
The Company has a disciplined approach to underwriting and risk management that emphasizes product returns and profitable growth over time rather than premium volume or market share.
Business / management underwriting discipline assertion · Filed 12/02/2026
shareholders at this Annual Meeting.
Proxy / amendment subject to shareholder approval · Filed 07/04/2026
Risk-Based Capital
The NAIC has an RBC requirement for most property and casualty insurance companies, which determines minimum capital requirements and is intended to raise the level of protection for policyholder obligations.
Risk-Based Capital · Filed 12/02/2026
Each of the Company’s foreign insurance subsidiaries had capital significantly above their respective regulatory requirements as of December 31, 2025.
Foreign insurance subsidiaries’ regulatory capital at December 31, 2025 · Filed 12/02/2026
At the end of the quarter, statutory capital and surplus was $31.596 billion, and the ratio of debt-to-capital was 25.3%.
September 30, 2026 statutory capital and surplus · Filed 16/10/2026
(as of December 31, in millions)
2025
2024
Debt:
Short-term
$
300
$
100
Long-term
9,054
8,004
Net unamortized fair value adjustments and debt issuance costs
(87)
(71)
Total debt
9,267
8,033
Shareholders’ equity:
Common stock and retained earnings, less treasury stock
35,394
32,831
Accumulated other comprehensive loss
(2,500)
(4,967)
Total shareholders’ equity
32,894
27,864
Total capitalization
$
42,161
$
35,897
Total capitalization as of December 31, 2025 was $42.16 billion, $6.26 billion higher than at December 31, 2024, primarily reflecting the impacts of (i) net income of $6.29 billion, (ii) other comprehensive income of $2.47 billion, primarily reflecting a decrease in net unrealized losses on investments due to a change in interest rates during 2025, (iii) an increase in debt outstanding of $1.23 billion and (iv) proceeds from the exercise of employee share options of $214 million, partially offset by (v) common share repurchases totaling $3.03 billion under the Company’s share repurchase authorizations and (vi) shareholder dividends of $987 million.
Capital Resources — consolidated capitalization at December 31, 2025 and 2024 · Filed 12/02/2026
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2026
2025
2026
2025
Common stock
Balance, beginning of period
$
26,186
$
25,728
$
25,910
$
25,452
Employee share-based compensation
59
30
188
166
Compensation amortization under share-based plans and other changes
62
59
209
199
Balance, end of period
26,307
25,817
26,307
25,817
Retained earnings
Balance, beginning of period
58,346
51,041
54,931
49,630
Net income
1,917
1,888
5,836
3,792
Dividends
(261)
(250)
(765)
(743)
Other
—
1
—
1
Balance, end of period
60,002
52,680
60,002
52,680
Accumulated other comprehensive loss, net of tax
Balance, beginning of period
(2,668)
(4,085)
(2,500)
(4,967)
Other comprehensive income (loss)
(4,395)
991
(4,563)
1,873
Balance, end of period
(7,063)
(3,094)
(7,063)
(3,094)
Treasury stock, at cost
Balance, beginning of period
(48,743)
(43,166)
(45,447)
(42,251)
Treasury stock acquired — share repurchase authorizations
(1,500)
(625)
(4,600)
(1,375)
Net shares acquired related to employee share-based compensation plans
(8)
(3)
(204)
(168)
Balance, end of period
(50,251)
(43,794)
(50,251)
(43,794)
Total shareholders’ equity
$
28,995
$
31,609
$
28,995
$
31,609
Common shares outstanding
Balance, beginning of period
208.6
225.1
217.5
226.6
Treasury stock acquired — share repurchase authorizations
(4.0)
(2.3)
(14.3)
(5.1)
Net shares issued under employee share-based compensation plans
0.3
0.2
1.7
1.5
Balance, end of period
204.9
223.0
991
(4,563)
1,873
Balance, end of period
(7,063)
(3,094)
(7,063)
(3,094)
Treasury stock, at cost
Balance, beginning of period
(48,743)
(43,166)
(45,447)
(42,251)
Treasury stock acquired — share repurchase authorizations
(1,500)
(625)
(4,600)
(1,375)
Net shares acquired related to employee share-based compensation plans
(8)
(3)
(204)
(168)
Balance, end of period
(50,251)
(43,794)
(50,251)
(43,794)
Total shareholders’ equity
$
28,995
$
31,609
$
28,995
$
31,609
Common shares outstanding
Balance, beginning of period
208.6
225.1
217.5
226.6
Treasury stock acquired — share repurchase authorizations
(4.0)
(2.3)
(14.3)
(5.1)
Net shares issued under employee share-based compensation plans
0.3
0.2
1.7
1.5
Balance, end of period
204.9
223.0
204.9
223.0
The accompanying notes are an integral part of the consolidated financial statements.
Consolidated Statement of Changes in Shareholders’ Equity — nine months ended September 30, 2026 · Filed 16/10/2026
Reconciliation of Net Income to Pre-Tax Underlying Underwriting Income (also known as Underlying Underwriting Gain)
Three Months Ended September 30,
Nine Months Ended September 30,
($ in millions, after-tax, except as noted)
2026
2025
2026
2025
Net income
$
1,917
$
1,888
$
5,836
$
3,792
Net realized investment (gains) losses
30
(21)
(33)
22
Core income
1,947
1,867
5,803
3,814
Net investment income
(908)
(850)
(2,624)
(2,387)
Other (income) expense, including interest expense
108
82
288
241
Underwriting income
1,147
1,099
3,467
1,668
Income tax expense on underwriting results
285
279
876
427
Pre-tax underwriting income
1,432
1,378
4,343
2,095
Pre-tax impact of net favorable prior year reserve development
(234)
(22)
(1,225)
(715)
Pre-tax impact of catastrophes
538
402
1,817
3,595
Pre-tax underlying underwriting income
$
1,736
$
1,758
$
4,935
$
4,975
Reconciliation of Net Income to After-Tax Underlying Underwriting Income (also known as Underlying Underwriting Gain)
Three Months Ended September 30,
Nine Months Ended September 30,
($ in millions, after-tax)
2026
2025
2026
2025
Net income
$
1,917
$
1,888
$
5,836
$
3,792
Net realized investment (gains) losses
Nine-month net income and underlying underwriting income reconciliation · Filed 16/10/2026
At the end of the quarter, statutory capital and surplus was $31.596 billion, and the ratio of debt-to-capital was 25.3%.
Quarter-end statutory capital and surplus · Filed 16/10/2026
Statutory capital and surplus represents the excess of an insurance company’s admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices.
Glossary: statutory capital and surplus · Filed 16/10/2026
The minimum consolidated net worth requirement is fixed during the term of the credit agreement at an amount equal to $17.8 billion (57.5% of the Company’s net worth as defined above as of March 31, 2026).
Credit agreement minimum consolidated net worth requirement · Filed 16/10/2026
At the end of the quarter, statutory capital and surplus was $31.596 billion, and the ratio of debt-to-capital was 25.3%.
Quarter-end statutory capital and surplus, September 30, 2026 · Filed 16/10/2026
Statutory capital and surplus represents the excess of an insurance company’s admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices.
Glossary: statutory capital and surplus · Filed 16/10/2026
Pursuant to the credit agreement covenants, the Company must maintain an excess of consolidated net worth, defined as shareholders’ equity determined in accordance with GAAP (excluding accumulated other comprehensive income (loss)) plus (a) trust preferred securities (not to exceed 15% of total capital) and (b) mandatorily convertible securities (combined with trust preferred securities, not to exceed 25% of total capital), over goodwill and other intangible assets.
Credit agreement: consolidated net-worth covenant definition · Filed 16/10/2026
