What changed in this filing

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Item 1A. Risk Factors

2025-02-27 compared with 2024-02-28 · 114 added, 69 removed, 321 unchanged (36% of the section changed)

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Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

Should any of these risks materialize, actual results could differ materially from the disclosed information, the trading value of our securities could be negatively impacted and our business, financial condition, and results of operations could be materially and adversely affected.

Should any of these risks materialize, actual results may differ materially from the disclosed information, the trading value of our securities could be negatively impacted and our business, financial condition and results of operations could be materially and adversely affected.

Our results could be adversely affected by catastrophic events.

We are exposed to unpredictable catastrophic events, including weather-related and other natural catastrophes, as well as acts of terrorism and wars.

We are exposed to unpredictable catastrophic events, including, but not limited to, weather-related and other natural catastrophes, as well as acts of terrorism and wars.

The frequency and/or severity of catastrophic events may be impacted in the future by the continued effects of climate change.

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These loss projections are approximations, reliant on a mix of quantitative and qualitative processes, and actual losses may exceed the projections by a material amount.

If our loss reserves are inadequate to meet our actual losses, our net income would be reduced or we could incur a loss.

We are required to maintain reserves to cover our estimated ultimate liability of losses and LAE for both reported and unreported claims incurred.

These reserves are only estimates of what we believe the settlement and administration of claims will cost based on facts and circumstances known to us.

In setting reserves for our reinsurance liabilities, we rely

on claims data supplied by our ceding companies and brokers, and we employ actuarial and statistical projections.

Unfavorable loss development may adversely affect our business, financial condition, results of operations or liquidity.

We are required to maintain reserves to cover our ultimate liability of losses and LAE for both reported and unreported claims.

These reserves are only estimates of what we believe the ultimate settlement and administration of claims will cost based on facts and circumstances known to us and actuarial and statistical analysis.

Loss reserve estimates are reconsidered, as necessary, as experience develops and to reflect other changes in circumstances that may affect our estimate of ultimate loss, and this could potentially result in increases to our reserves.

In setting reserves for our reinsurance liabilities, we rely on claims data supplied by our ceding companies and brokers, along with other data that may affect our estimate of ultimate loss and actuarial and statistical analysis to arrive at an estimate of ultimate liability for losses and LAE.

The information received from our ceding companies is not always timely or accurate, which can contribute to inaccuracies in our loss projections.

Because of the uncertainties that surround our estimates of loss and LAE reserves, we cannot be certain that ultimate losses and LAE payments will not exceed our estimates.

If our reserves are deficient, we would be required to increase loss reserves in the period in which such deficiencies are identified which would cause a charge to our earnings and a reduction of capital.

During the past five calendar years, the reserve re-estimation process resulted in an increase to our pre-tax net income in 2023, 2022, 2021 and 2019 and resulted in a decrease to our pre-tax net income in 2020:

For the insurance and reinsurance businesses, ultimate losses may differ materially from our expectations at the time we underwrite the business.

Because of the uncertainties that surround our estimates of loss and LAE reserves, we cannot be certain that ultimate losses and LAE payments will not exceed the estimates we make at any given time.

For example, in the quarter ended December 31, 2024, the Company increased its loss reserves by $1.7 billion, pre-tax, primarily driven by unfavorable development in U.S.

casualty insurance lines of business.

Loss experience in these lines of business is very unpredictable and has been exacerbated by social inflation factors such as uncertain legal system outcomes, increased frequency of high-severity claims and third-party litigation funding.

If our reserves are deficient in future periods, we may be required to increase loss reserves in the period in which such deficiencies are identified which would cause a charge to our earnings, a reduction of capital and could result in adverse effects on our business, financial condition, results of operation or liquidity.

During the past five calendar years, the reserve refinement process resulted in a decrease to our pre-tax net income in 2024 and 2020 and resulted in an increase to our pre-tax net income in 2023, 2022 and 2021:

Calendar year:

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(Dollars in millions)

2024 $ 1,337 decrease

2023 5 increase

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2020 401 decrease

2019 64 increase

The difficulty in estimating our reserves is significantly more challenging as it relates to reserving for potential A&E liabilities.

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Legal tactics and judicial and legislative developments affecting the scope of insurers’ liability, which can be difficult to predict, also contribute to uncertainties in estimating reserves for A&E liabilities.

In addition, since reserve estimates of aggregate loss costs for prior years are sometimes factored into pricing our insurance products, inaccurate reserves can lead to our products not being priced adequately to cover actual losses and related loss expenses in order to generate a profit.

The failure to accurately assess underwriting risk and establish adequate premium rates could reduce our net income or result in a net loss.

Our success depends on our ability to accurately assess the risks associated with the businesses on which the risk is retained.

If we fail to accurately assess the risks we retain, we may fail to establish adequate premium rates to cover our losses and LAE.

If we fail to accurately assess the risks we retain, we may fail to establish adequate premium rates or contract terms (i.e.

limits, deductibles, etc.) to cover our losses and LAE.

This could reduce our net income and even result in a net loss.

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If any of these factors were to result in a decline in the demand for (re)insurance or an overall increase in (re)insurance capacity, our net income could decrease.

If we are unable or choose not to purchase reinsurance and transfer risk to the reinsurance markets, our net income could be reduced or we could incur a net loss in the event of unusual loss experience.

If we are unable to or choose not to purchase reinsurance and transfer risk to the reinsurance markets, our net income could be reduced or we could incur a net loss in the event of unusual loss experience.

We are generally less reliant on the purchase of reinsurance than many of our competitors, in part because of our strategic emphasis on underwriting discipline and management of the cycles inherent in our business.

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With the expansion of the capital markets into insurance linked financial instruments, we increased our use of capital market products for catastrophe reinsurance.

In addition, we have increased some of our quota share contracts with larger

retrocessionaires.

In addition, we have increased some of our quota share contracts with larger retrocessionaires.

The percentage of business that we reinsure may vary considerably from year to year, depending on our view of the relationship between cost and expected benefit for the contract period.

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Percentage of ceded written premiums to gross written premiums 13.3 % 11.5 % 11.5 % 12.3 % 13.0 %

The effects of emerging claim and coverage issues on our business are uncertain.

As industry practices and legislative, regulatory, judicial, social, financial, technological and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge.

These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the frequency and severity of claims.

Examples of emerging claims and coverage issues include, but are not limited to:

• judicial expansion of policy coverage and a greater propensity to grant claimants more favorable amounts and the impact of new theories of liability;

• plaintiffs targeting property and casualty insurers in purported class action litigation relating to claims-handling and other practices;

• social inflation trends, including higher and more frequent claims, higher awards in favor of plaintiffs and increases in the value of claims due to third party funding;

• medical developments that link health issues to particular causes, resulting in liability claims;

• claims relating to unanticipated consequences of current or new technologies, including cyber security-related risks;

• claims relating to potentially changing climate conditions.

In some instances, these emerging issues may not become apparent for some time after we have issued the affected insurance policies.

As a result, the full extent of liability under our insurance or reinsurance contracts may not be known for many years after issuance.

A decline in our financial strength ratings could adversely affect our standing among cedents and broker partners and our ability to grow premiums and earnings.

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Financial strength ratings are used by cedents, agents and brokers to assess the financial strength and credit quality of reinsurers and insurers.

A downgrade or withdrawal of any of these ratings could adversely affect our ability to market our reinsurance and insurance products, our ability to compete with other reinsurers and insurers and our ability to write new business, which in turn could impact our profitability and results.

downgrade or withdrawal of any of these ratings could adversely affect our ability to market our reinsurance and insurance products, our ability to compete with other reinsurers and insurers and our ability to write new business, which in turn could impact our profitability and results.

Consistent with market practice, much of our treaty reinsurance business allows the ceding company to terminate the contract or seek collateralization of our obligations in the event of a rating downgrade below a certain threshold.

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A decline in our debt ratings could increase our borrowing costs and adversely affect our ability to access capital markets at attractive rates.

If our debt ratings are downgraded, we could incur higher borrowing costs, higher cost of capital, and our ability to access the capital markets at attractive rates could be impacted.

We are unable to provide any guarantees on whether or not or ratings may be downgraded by any of our rating agencies in the future.

If our debt ratings are downgraded, we could incur higher borrowing costs, higher cost of capital, increased collateral requirements and our ability to access the capital markets at attractive rates could be impacted.

We are unable to provide assurances as to whether or not our ratings may be downgraded by any of the rating agencies in the future.

See also ITEM 1, “Debt Ratings”.

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If issuers of individual investments are unable to meet their obligations, investment income will be reduced and realized capital losses may arise.

We have exposure to counterparties through a variety of commercial transactions and arrangements, including reinsurance transactions and agreements with banks, hedge funds and other investment vehicles that expose us to credit risk in the event our counterparty fails to perform its obligations.

We have invested a portion of our investment portfolio in equity securities.

The value of these assets fluctuates with changes in the markets.

In times of economic weakness, the fair value of these assets may decline, and may negatively impact net income.

In times of economic weakness, the fair value of these assets may decline.

We also invest in non-traditional investments which have different risk characteristics than traditional fixed income and equity securities.

These alternative investments are comprised primarily of private equity limited partnerships.

The changes in value and investment income/(loss) for these partnerships may be more volatile than over-the-counter securities.

The failure to maintain access to enough cash, readily salable or unencumbered financial assets to meet near-term financial obligations.

The failure to maintain access to enough cash, readily salable or unencumbered financial assets to meet near-term financial obligations may adversely impact business relations and creditworthiness.

Liquidity risk is a manifestation of events that are driven by other risk types (insurance, investment, operational).

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Additionally, a rapid increase in interest rates can create a short-term pressure on regulatory capital models.

The Company's liquidity could be affected by a broad market illiquidity event, default by significant market participant, inability to sell assets, inability to access bank accounts, inability to access capital and credit markets, concentration of CAT events, or unforeseen capital needs.

A failure to have sufficient cashflow to meet obligations may adversely affect business relations and the creditworthiness of the Company.

We may require additional capital or financing sources in the future, which may not be available or may be available only on unfavorable terms.

Our future capital requirements depend on many factors, including rating agency and regulatory requirements, the performance of our investment portfolio, our ability to write new business successfully, the frequency and severity of catastrophe events and our ability to establish premium rates and loss reserves at levels sufficient to cover losses.

We may need to raise additional funds through debt or equity financings or access funds through existing or new credit facilities or through short-term repurchase agreements.

We may also from time to time seek to refinance debt as amounts become due or commitments expire.

Any equity or debt financing or refinancing, if available at all, may be on terms that are not favorable to us.

In the case of equity financings, dilution to our shareholders could result, and in any case, such securities may have rights, preferences and privileges that are senior to those of our common shares.

Our access to funds under existing credit facilities is dependent on the ability of the banks that are party to the facilities to meet their funding commitments.

Because of our holding company structure, our ability to pay dividends, interest and principal is dependent on receiving dividends, loan payments and other funds from our subsidiaries.

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We are dependent on our key personnel.

In January 2025, James Williamson, Executive Vice President and Chief Operating Officer, was appointed President and CEO and member of the Board of Directors after the departure of our former President and CEO, Juan Andrade.

Our success has been, and will continue to be, dependent on our ability to retain the services of our existing key executives and other key employees, and to attract and retain additional qualified personnel in the future.

The loss of the services of any key executive officer or the inability to hire and retain other highly qualified personnel in the future, particularly those experienced in the property and casualty industry, could adversely affect our ability to conduct business.

The loss of the services of any key executive officer , the failure to successfully effectuate a permanent leadership transition or the inability to hire and retain other highly qualified personnel in the future, particularly those experienced in the property and casualty industry, could adversely affect our ability to conduct business.

Changes to or turnover among senior management or key executives could also disrupt the Company’s strategic focus, operational capabilities and may impede our ability to act quickly and efficiently in executing our business strategy.

Special considerations apply to our Bermuda operations.

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The Bermuda government places a six-year term limit on individuals with work permits, subject to specified exemptions for persons deemed to be key employees of businesses with a significant physical presence in Bermuda.

Currently, all our Bermuda-based professional employees who require work permits have been granted permits by the Bermuda government that expire at various times between April 2024 and October 2028.

Currently, all our Bermuda-based professional employees who require work permits have been granted permits by the Bermuda government that expire at various times between March 2025 and March 2030.

We rely on our processes, people and systems to maintain our operations and manage the operational risks inherent to our business.

Any errors, omissions or misconduct by our employees or third-party agents in the execution of these processes could adversely affect our business, results of operations and financial condition.

We rely on our processes, people and systems to maintain and execute our operations.

We seek to monitor and control our exposure to risks arising from these processes through an enterprise risk management framework, internal controls, management review and other processes.

We cannot provide total assurance that these processes will effectively identify or control all risks, or that our employees and third-party agents will effectively execute them.

Losses may result from, among other things, actual or alleged fraud;

or failure to document transactions properly, obtain proper internal authorization, comply with underwriting or other internal guidelines or comply with regulatory requirements.

It is not always possible to deter or prevent employee misconduct, and the precautions that we take to prevent and detect this activity may not be effective in all cases.

Resulting losses could adversely affect our business, results of operations and financial condition.

We are subject to cybersecuri ty risks that could negatively impact our business operations.

Cybersecurity threats and incidents have increased in recent years, heightening related risks.

We are dependent upon our information technology platform, including our processing systems, data and electronic transmissions in our business operations.

Security breaches and other cyber threats could expose us to the loss or misuse of our technology systems or information, litigation and potential liability.

In addition, cyber incidents that impact the availability, reliability, speed, accuracy or other proper functioning of these systems could have a significant negative impact on our operations and possibly our results.

An incident could also result in a violation of applicable privacy and other laws, damage our reputation, cause a loss of customers or give rise to monetary fines and other penalties, which could be significant.

Security breaches and other cyber threats, including those at third parties that have our information, could expose us to the loss or misuse of our technology systems or information, litigation and potential liability.

In addition, cyber incidents that impact the confidentiality, integrity, availability, authenticity or other proper functioning of these systems could have a significant negative impact on our operations and possibly our financial results.

An incident could also result in a violation of applicable privacy and other laws, damage our reputation, cause a loss of customers, result in regulatory action or give rise to monetary fines and other penalties, which could be significant, and ultimately have a material adverse effect on our business or operations.

The cybersecurity regulatory environment is evolving, in particular with respect to emerging technologies, such as artificial intelligence, and it is likely that the costs of complying with new or developing regulatory requirements will increase.

We are not aware of a cybersecurity incident that materially affected the Company, including its business strategy, results of operations or financial condition.

Exposure to cybersecurity risk is increasing systematically due to greater digital dependence and increased possible losses due to a catastrophic cybersecurity event.

Cyber catastrophes are not bound by time or geographic limitations and cyber catastrophic perils do not have well-established definitions and fundamental physical properties.

Rather, cybersecurity risks are engineered by human actors and thus are continuously evolving, often in ways that are engineered specifically to evade established loss mitigation controls.

Any losses incurred from these risks are also dependent on our clients’ and our third-party service providers' cybersecurity practices and defenses, as well as how policy terms and conditions interact with the evolving threat landscape.

We are dependent on brokers and agents for business developments.

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As a financial services company, we are exposed to model risk.

We utilize financial models to derive metrics and drive analysis to assist in decision making across key areas, such as pricing, underwriting, reserving, investment management,

ceding business, capital allocation and risk management.

We utilize financial models to derive metrics and drive analysis to assist in decision making across key areas, such as pricing, underwriting, reserving, investment management, ceding business, capital allocation and risk management.

These models may not operate properly, may contain incorrect information and errors and may rely on assumptions and projections that are inherently uncertain.

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Across our global business centers, there is risk that our operations, systems or data, or those of third parties on whom we rely, may be disrupted.

All ultimately result in workforce unavailability among others.

We may experience a disruption in business continuity as a result of pandemic and public health crises, geopolitical risks including armed conflict and civil unrest, terrorist events, natural disasters, cyber-attacks affecting technology services, as well as governmental, business and societal responses to such events, such as restrictions on public gatherings, sanctions, trade restrictions, increased unemployment and supply chain disruptions.

All such events may ultimately result in workforce unavailability among other operational impacts.

Our industry is highly competitive, and we may not be able to compete successfully in the future.

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Our competitors include independent reinsurance and insurance companies, subsidiaries or affiliates of established worldwide insurance companies, reinsurance departments of certain insurance companies and domestic and international underwriting operations, including underwriting syndicates at Lloyd’s of London.

According to S&P, Everest ranks among the top ten global property and casualty reinsurance groups, where more than two-thirds of the market share is concentrated.

According to S&P, Everest ranks among the top ten global property and casualty reinsurance groups.

The worldwide net premium written by the Top 40 global reinsurance groups for both life and non-life business was estimated to be $318 billion in 2023 according to data compiled by S&P.

In addition to existing competitors, the entry of alternative capital market products and new company formations provide additional sources of reinsurance and insurance capacity, which could reduce our market share.

In addition to existing competitors, the entry of alternative capital

market products and new company formations provide additional sources of reinsurance and insurance capacity, which could reduce our market share.

SHAREHOLDERS, LEGAL & REGULATION

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The Board has indicated that it will apply these bye-law provisions in such manner that “passive institutional investors” will be treated similarly to investment companies.

For this purpose, “passive institutional investors” include all persons who are eligible, pursuant to Rule 13d-1(b)(1) under the U.S.

Securities Exchange Act of 1934, (“the Exchange Act”) to file a short-form statement on Schedule 13G, other than an insurance company or any parent holding company or control person of an insurance company.

For this purpose, “passive institutional investors” include all persons who are eligible, pursuant to Rule 13d-1(b)(1) under the Exchange Act to file a short-form statement on Schedule 13G, other than an insurance company or any parent holding company or control person of an insurance company.

Investors in Group may have more difficulty in protecting their interests than investors in a U.S.

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Group’s bye-laws provide, as permitted by Bermuda law, that the Board may delegate any of its powers to committees that the Board appoints, and those committees may consist partly or entirely of non-directors.

Delaware law allows the

board of directors of a corporation to delegate many of its powers to committees, but those committees may consist only of directors.

Delaware law allows the board of directors of a corporation to delegate many of its powers to committees, but those committees may consist only of directors.

Interested Directors.

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Within one month of the court’s appraisal, the acquiring shareholders are entitled either to acquire all shares involved at the price fixed by the court or cancel the notice given to the remaining shareholders.

If shares were acquired under the notice at a price below the court’s appraisal price, the acquiring shareholders must either pay the difference in price or cancel the notice and return

the shares thus acquired to the shareholder, who must then refund the purchase price.

If shares were acquired under the notice at a price below the court’s appraisal price, the acquiring shareholders must either pay the difference in price or cancel the notice and return the shares thus acquired to the shareholder, who must then refund the purchase price.

There are no comparable provisions under Delaware law.

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Class actions and derivative actions are generally not available to shareholders under the laws of Bermuda.

However, the Bermuda courts ordinarily would be expected to follow English case law precedent, which would permit a shareholder to bring an action in the name of Group to remedy a wrong done to Group where the act complained of is alleged to be beyond the corporate power of Group or illegal or would result in the violation of Group’s memorandum of association or bye-laws.

However, the Bermuda courts ordinarily would be expected to follow English

case law precedent, which would permit a shareholder to bring an action in the name of Group to remedy a wrong done to Group where the act complained of is alleged to be beyond the corporate power of Group or illegal or would result in the violation of Group’s memorandum of association or bye-laws.

Furthermore, the court would give consideration to acts that are alleged to constitute a fraud against the minority shareholders or where an act requires the approval of a greater percentage of Group’s shareholders than actually approved it.

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Under Bermuda law, this indemnification may not extend to any matter involving fraud or dishonesty of which a director or officer may be guilty in relation to the company, as determined in a final judgment or decree not subject to appeal.

be in or not opposed to the best interests of the corporation and (2) if the action or proceeding involves a criminal offense, the director or officer had no reasonable cause to believe his or her conduct was unlawful.

Under Delaware law, a corporation may indemnify a director or officer who becomes a party to an action, suit or proceeding because of his position as a director or officer if (1) the director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and (2) if the action or proceeding involves a criminal offense, the director or officer had no reasonable cause to believe his or her conduct was unlawful.

Enforcement of Civil Liabilities.

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To date, no material fine, penalty or restriction has been imposed on us for failure to comply with any insurance law or regulation.

As a result of the previous dislocation of the financial markets, Congress and the previous administration in the United States implemented changes in the way the financial services industry is regulated.

As a result of the previous dislocation of the financial markets, the U.S.

government implemented changes in the way the financial services industry is regulated.

Some of these changes are also impacting the insurance industry.

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Treasury established the Federal Insurance Office with the authority to monitor all aspects of the insurance sector, monitor the extent to which traditionally underserved communities and consumers have access to affordable non-health insurance products, to represent the United States on prudential aspects of international insurance matters, to assist with administration of the Terrorism Risk Insurance Program and to advise on important national and international insurance matters.

In addition, several European regulatory bodies are in process of updating existing regulations or developing new capital adequacy directives for insurers and reinsurers.

In addition, several European regulatory bodies are in the process of updating existing regulations or developing new capital adequacy directives for insurers and reinsurers.

The future impact of such initiatives or new initiatives from the current governmental authorities, if any, on our operation, net income (loss) or financial condition cannot be determined at this time.

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If Bermuda Re were to become subject to any insurance laws of the United States or any U.S.

state at any time in the future, it might be required to post deposits or maintain minimum surplus levels and might be prohibited from engaging in lines of business or from writing some types of policies.

state at any time in the future, it might be required to post deposits or maintain minimum surplus levels and might be prohibited from engaging in lines of business or from writing certain types of policies.

Complying with those laws could have a material adverse effect on our ability to conduct business in Bermuda and international markets.

Bermuda Re may need to be licensed or admitted in additional jurisdictions to develop its business.

As Bermuda Re’s business develops, it will monitor the need to obtain licenses in jurisdictions other than Bermuda and the UK, where it has an authorized branch, in order to comply with applicable law or to be able to engage in additional insurance-related activities.

As Bermuda Re’s business develops, it will monitor the need to obtain licenses in jurisdictions other than Bermuda and the U.K., where it has an authorized branch, in order to comply with applicable law or to be able to engage in additional insurance-related activities.

In addition, Bermuda Re may be at a competitive disadvantage in jurisdictions where it is not licensed or does not enjoy an exemption from licensing relative to competitors that are so licensed or exempt from licensing.

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Bermuda Re’s reinsurance clients typically require it to post a letter of credit or enter into other security arrangements.

If Bermuda Re is unable to obtain or maintain a letter of credit facility on commercially acceptable terms or is unable to arrange for other types of security, its ability to operate its business may be severely limited.

If Bermuda Re is unable to obtain

or maintain a letter of credit facility on commercially acceptable terms or is unable to arrange for other types of security, its ability to operate its business may be severely limited.

If Bermuda Re defaults on any letter of credit that it obtains, it may be required to prematurely liquidate a substantial portion of its investment portfolio and other assets pledged as collateral.

Regulatory and legislative developments related to cybersecurity could have an adverse impact on our business.

In October 2017, the NAIC adopted the Insurance Data Security Model Law, which was intended to establish the standards for data security and for the investigation and notification of data breaches applicable to insurance licensees in states adopting such law, requiring insurers, and other entities required to be licensed under state insurance laws to comply with certain requirements, such as developing and maintaining a written information security program, conducting risk assessments and overseeing the data security practices of third-party vendors.

The Insurance Data Security Model Law has now adopted in 23 states.

Regulatory and legislative developments related to cybersecurity, privacy, data protection and artificial intelligence could have an adverse impact on our business.

In October 2017, the NAIC adopted the Insurance Data Security Model Law (“IDSML”), which was intended to establish the standards for data security and for the investigation and notification of data breaches applicable to insurance licensees in states adopting such law.

The IDSML requires insurers, and other entities required to be licensed under state insurance laws, to comply with certain requirements, such as developing and maintaining a written information security program, conducting risk assessments and overseeing the data security practices of third-party vendors.

The IDSML has now been adopted in 23 states.

In addition, certain state insurance regulators are developing or have developed their own regulations that may impose additional regulatory requirements relating to cybersecurity on insurance and reinsurance companies.

For example, the New York State Department of Financial Services has an applicable regulation pertaining to cybersecurity for all banking and insurance entities under its jurisdiction, effective as of March 1, 2017 and amended on November 1, 2023.

The SEC has also adopted new rules effective September 5, 2023 to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance and incidents.

Regulation of cybersecurity, privacy and data protection, operational resiliency and artificial intelligence has also developed globally.

We cannot predict the impact these laws and regulations will have on our business, financial condition or results of operations, but our insurance and reinsurance companies could incur additional costs resulting from compliance with such laws and regulations.

If international tax laws change, our net income may be impacted.

The Organization for Economic Co-operation and Development (“OECD”) and its member countries which includes the United States, have been focusing for an extended period on issues related to the taxation of multinational corporations, such as the comprehensive plan set forth by the OECD to create an agreed set of international tax rules for preventing base erosion and profit shifting.

Recently they agreed upon a broad framework for overhauling the taxation of multinational corporations that includes, among other things, profit reallocation rules and a 15% global minimum corporate income tax rate.

These proposals, if implemented, could have an impact on net income and effective tax rate.

The Company may be subject to additional income taxes, which would reduce our net income.

The Organization for Economic Co-operation and Development (“OECD”) and its member countries, including the United States, had been focusing for an extended period on issues related to the taxation of multinational corporations, such as the comprehensive plan set forth by the OECD to create an agreed set of international tax rules for preventing base erosion and profit shifting.

The OECD has now agreed upon a broad framework for overhauling the taxation of multinational corporations that includes, among other things, profit reallocation rules (Pillar One) and a 15% global minimum corporate income tax rate (Pillar Two).

The Pillar Two model rules have been enacted in several of the jurisdictions in which the Company and its subsidiaries operate, thus, the Company or its subsidiaries are liable to pay a top-up tax for any deficiency between the minimum tax rate of 15% and the effective tax rate per jurisdiction.

Group and/or various Group companies may be subject to additional income taxes, which would reduce our net income.

tax law changes, our net income may be impacted.

The 2017 TCJA addressed what some members of Congress had expressed concern about for several years, which was U.S.

corporations moving their place of incorporation to low-tax jurisdictions to obtain a competitive advantage over domestic corporations that are subject to the U.S.

The 2017 Tax Cuts and Jobs Act (“TCJA”) was adopted to address incorporation by U.S.

corporations in low-tax jurisdictions to obtain a competitive advantage over domestic corporations that are subject to the U.S.

corporate income tax rate of 21%.

Specifically, it addressed their concern over a perceived competitive advantage that foreign-controlled insurers and reinsurers may have had over U.S.

Specifically, the TCJA addressed concern over a perceived competitive advantage that foreign-controlled insurers and reinsurers may have had over U.S.

controlled insurers and reinsurers, resulting from the purchase of reinsurance by U.S.

insurers from affiliates operating in some foreign jurisdictions, including Bermuda.

insurers from affiliates operating in certain foreign jurisdictions, including Bermuda.

Such affiliated reinsurance transactions may subject the U.S.

ceding companies to a Base Erosion and Anti-abuse Tax (“BEAT”) of 10% from 2019 to 2025 and 12.5% thereafter which may exceed its regular income tax.

ceding companies to a Base Erosion and Anti-abuse Tax of 10% from 2019 to 2024 and 12.5% thereafter, which may exceed its regular income tax.

In addition, new legislation, as well as proposed and final regulations may further limit the ability of the Company to execute alternative capital balancing transactions with unrelated parties.

This would further impact our net income and effective tax rate.

On August 16, 2022, the Inflation Reduction Act (“IRA”) was enacted.

On August 16, 2022, the IRA was enacted.

We have evaluated the tax provisions of the IRA, the most significant of which are the corporate alternative minimum tax and the share repurchase excise tax and do not expect the legislation to have a material impact on our results of operations.

On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023, which will apply a 15% corporate income tax to certain Bermuda businesses in fiscal years beginning on or after January 1, 2025.

The act includes a provision referred to as “The Economic Transition Adjustment”, which is intended to provide a fair and equitable transition into the tax regime, and results in a deferred tax benefit for the Company.

On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023 (“The 2023 Act”), which will apply a 15% corporate income tax to certain Bermuda businesses in fiscal years beginning on or after January 1, 2025.

The 2023 Act includes a provision referred to as “The Economic Transition Adjustment” (the “ETA”), which is intended to provide a fair and equitable transition into the new tax regime, and results in a deferred tax benefit for the Company.

However, on January 15, 2025, the OECD issued Guidance related to “deferred tax assets arising from tax benefits provided by General Government” whereby it has restricted the utilization of those deferred tax benefits against the computation of its Pillar Two Global Minimum Taxes to approximately 20% of the originally calculated amounts and

only for a grace period of two years through 2026.

If the Bermuda Ministry of Finance amends The 2023 Act in response to this Guidance, the exact impact of any such amendments is uncertain but there is a risk that it results in a reduction in the Company's Deferred Tax Assets.

Group and/or Bermuda Re may be subject to U.S.

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source dividend income.

However, if the IRS were to successfully assert that Bermuda Re was engaged in a U.S.

However, if the U.S.

Internal Revenue Service (the “IRS”) were to successfully assert that Bermuda Re was engaged in a U.S.

trade or business, Bermuda Re would be required to pay U.S.

14 unchanged sentences

source dividend income.

However, if the IRS successfully asserted that we had material amounts of income that was subject to the U.S.

However, if the IRS successfully asserted that we had material amounts of income that were subject to the U.S.

taxing jurisdiction, we would be required to pay U.S.

4 unchanged sentences

If Bermuda Re became subject to U.S.

income tax on its income, or if Group became subject to income tax, our income could also be subject to U.S.

income tax on its income, or if Group became subject to U.S.

income tax, our income could also be subject to U.S.

branch profits tax.

3 unchanged sentences

corporate income tax rate and the 30% branch profits tax rate is a net tax rate of 44.7%.

The imposition of these taxes would reduce out net income.

The imposition of these taxes would reduce our net income.

Our net income will be reduced if U.S.

3 unchanged sentences

federal excise tax of one percent.

In addition, Bermuda Re is subject to federal excise tax on reinsurance and insurance premiums with respect to risks located in the United States.

In addition, Bermuda Re is subject to withholding tax on dividend income from U.S.

2 unchanged sentences

shareholders net income may be impacted.

In January 2022, Treasury and the IRS released proposed regulations regarding the determination and inclusion of related-person insurance income (“RPII”).

In January 2022, the U.S.

Treasury and the IRS released proposed regulations regarding the determination and inclusion of related-person insurance income (“RPII”).

The regulations, if finalized without modifications, could cause RPII to be attributable to the Company’s U.S.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors