6 unchanged sentences
Our success depends on our ability to accurately assess the risks related to the businesses and people that we insure.
−Removed: We establish loss and loss adjustment expense reserves for the ultimate payment of all claims that have been incurred, and the related costs of adjusting those claims, as of the date of our financial statements.
+Added: We establish loss and loss adjustment expense reserves for the ultimate payment of all claims and the related costs of adjusting those claims, as of the date of our financial statements.
Reserves do not represent an exact calculation of liability.
−Removed: Rather, reserves represent an estimate of what we expect the ultimate settlement and administration of claims will cost us, and our ultimate liability may be greater or less than our estimate.
+Added: Rather, reserves represent an estimate of ultimate settlement cost and our ultimate liability may be greater or less than our estimate.
As part of the reserving process, we review historical data and consider the impact of such factors as:
11 unchanged sentences
Approximately 79.6% of our net casualty loss reserves were associated with "occurrence" policies as of December 31, 2023.
−Removed: • Even when a claim is received (irrespective of whether the policy is a "claims made" or "occurrence" basis form), it may take considerable time to fully appreciate the extent of the covered loss suffered by the insured and, consequently, estimates of loss associated with specific claims can increase over time.
+Added: • Even when a claim is received (irrespective of whether the policy is a "claims made" or "occurrence" basis form), it may take considerable time to fully recognize the extent of the covered loss suffered by the insured and, consequently, estimates of loss associated with specific claims can increase over time.
• New theories of liability are enforced retroactively from time to time by courts.
88 unchanged sentences
We are closely monitoring the impact of the COVID-19 pandemic and the related economic impact on all aspects of our business, including its impact on premium volume, the fair value of our investment portfolio and loss reserves, as well as the potential for delayed reporting and settlement of claims.
−Removed: If pandemics, outbreaks and other events occur or re-occur for a significant length of time, and measures that are put into place by various governmental authorities to stabilize the economy are not effective, our business, financial condition, results of operations and cash flows may be materially adversely affected.
Global climate change may have a material adverse effect on our financial results.
2 unchanged sentences
While most catastrophes are restricted to fairly specific geographic areas, the extent of loss and damage for insurance purposes is a function of both the total amount of insured value in the area affected by the event and the severity of the event.
−Removed: attempt to manage this exposure by using sophisticated computer models to help assess our exposure to catastrophic events, purchasing extensive reinsurance protection from financially strong counterparties and limiting the concentration of property business by geographic area.
−Removed: However, assessing the risk of loss and damage and the range of approaches to address the adverse effects of climate change, including impacts related to extreme weather events and slow onset events, remains a challenge and may materially adversely impact our business, financial condition and results of operations.
+Added: We attempt to manage this exposure through careful and disciplined underwriting, using sophisticated computer models to help assess our exposure to catastrophic events, purchasing extensive reinsurance protection from financially strong counterparties and limiting the concentration of property business by geographic area.
+Added: However, assessing the risk of loss
+Added: and damage and the range of approaches to address the adverse effects of climate change, including impacts related to extreme weather events and slow onset events, remains a challenge and may materially adversely impact our business, financial condition and results of operations.
Risks Related to Market Conditions and our Business Operations
56 unchanged sentences
When this occurs, insurance prices tend to decline and policy terms and conditions become more favorable to the insureds.
−Removed: Conversely, hard markets occur when there is not enough insurance capital capacity in the market to meet the
−Removed: needs of potential insureds, causing insurance prices to generally rise and policy terms and conditions to become more favorable to the insurers.
+Added: Conversely, hard markets occur when there is not enough insurance capital capacity in the market to meet the needs of potential insureds, causing insurance prices to generally rise and policy terms and conditions to become more favorable to the insurers.
Although an individual insurance company's financial performance depends on its own specific business characteristics, the profitability of most P&C insurance companies tends to follow this cyclical market pattern.
24 unchanged sentences
We currently depend largely on the wholesale distribution model.
−Removed: If the wholesale distribution model were to be significantly altered by changes in the way E&S insurance were marketed, including, without limitation, through use of the internet, it could have a material adverse effect on our premiums, underwriting results and profits.
+Added: If the wholesale distribution model were to be significantly altered by changes in the way E&S insurance is marketed, including, without limitation, through use of the internet, it could have a material adverse effect on our premiums, underwriting results and profits.
We may not be able to continue to compete successfully in the insurance markets.
−Removed: Increased competition in these markets could result in a change in the supply and demand for insurance, affect our ability to price our products at risk-adequate rates and retain existing business, or underwrite new business on favorable terms.
+Added: Increased competition in these markets could result in a change in the supply and demand for insurance, affect our ability to price our products at risk-adequate
+Added: rates and retain existing business, or underwrite new business on favorable terms.
If this increased competition so limits our ability to transact business, our operating results could be adversely affected.
44 unchanged sentences
Among other things, we rely on these systems to interact with brokers and insureds, to underwrite business, to prepare policies and process premiums, to perform actuarial and other modeling functions, to process claims and make claims payments and to prepare internal and external financial statements and information.
−Removed: In addition, some of these systems include or rely on third-party systems not located on our premises or under our control.
+Added: In addition, some of these systems include or rely on third-party systems not located on our premises or under our direct control.
Events such as natural catastrophes, terrorist attacks, industrial accidents, third-party system or network outages or computer malware may cause our systems to fail or be inaccessible for extended periods of time.
5 unchanged sentences
Any such event may result in material operational disruptions as well as unauthorized access to or the disclosure or loss of our proprietary information or our customers’ data and information, which in turn may result in legal claims, regulatory scrutiny and liability, the incurrence of costs to eliminate or mitigate further exposure, the loss of customers or affiliated advisors, reputational harm or other damage to our business.
−Removed: In addition, the trend toward general public notification of such incidents could exacerbate the harm to our business, financial condition and results of operations.
−Removed: Even if we successfully protect our technology infrastructure and the confidentiality of sensitive data, we could suffer harm to our business and reputation if attempted security breaches are publicized.
−Removed: We cannot be certain that advances in criminal
−Removed: capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology or other security measures protecting the networks and systems used in connection with our business.
+Added: We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology or other security measures protecting the networks and systems used in connection with our business.
We employ third-party and open-source licensed software for use in our business, and the inability to maintain these licenses, errors in the software we license or the terms of open-source licenses could result in increased costs, or reduced service levels, which would adversely affect our business.
3 unchanged sentences
In addition, integration of new third-party software may require significant work and require substantial investment of our time and resources.
−Removed: Our use of additional or alternative third-party software would require us to enter into license agreements with third parties, which may not be available on commercially reasonable terms or at all.
+Added: Our use of additional or alternative third-party software would require us to enter into license agreements with third parties, which may not be available on commercially reasonable terms or at all, and add complexity to the environment.
Many of the risks associated with the use of third-party software cannot be eliminated, and these risks could negatively affect our business.
4 unchanged sentences
Such risk could be difficult or impossible to eliminate, and such an event could adversely affect our business, financial condition and results of operations.
+Added: Artificial intelligence is an evolving and rapidly growing technology.
+Added: The rapid evolution of artificial intelligence ("AI") could exacerbate the information technology related risks described above, as well as alter the competitive landscape.
+Added: While we anticipate that we will continue to research and implement AI-based technology solutions to both mitigate risk and increase automation in our environment, it is possible that bad actors and/or competitors will leverage AI solutions more effectively to either exploit vulnerabilities or take market share.
+Added: Either outcome could negatively impact our business.
Cloud provider service failure or control weakness could adversely affect our business.
−Removed: We employ cloud-based services to host many of our applications and intend to expand our use.
−Removed: As we expand our use of cloud-based services, we will increasingly rely on third-party cloud providers to maintain appropriate controls and safeguards to protect confidential information we receive, including personal, personally identifiable, sensitive, confidential or proprietary data, and the integrity and continuous operation of our proprietary technology platform.
+Added: We employ cloud-based services to host the majority of our applications and intend to continue and expand our use.
+Added: As we use cloud-based services, we will rely on third-party cloud providers to maintain appropriate controls and safeguards to protect confidential information we receive, including personal, personally identifiable, sensitive, confidential or proprietary data, and the integrity and continuous operation of our proprietary technology platform.
While we conduct due diligence on these cloud providers with respect to their security and business controls, we may not have the visibility to effectively monitor the implementation and efficacy of these controls.
10 unchanged sentences
The insurance and reinsurance industries have historically been cyclical businesses with intense competition, often based on price.
−Removed: If actual renewals do not meet expectations or if we choose not
−Removed: to write a renewal because of pricing conditions, our written premiums in future years and our future operations would be materially adversely affected.
+Added: If actual renewals do not meet expectations or if we choose not to write a renewal because of pricing conditions, our written premiums in future years and our future operations would be materially adversely affected.
Our failure to accurately and timely pay claims could materially and adversely affect our business, financial condition, results of operations and prospects.
6 unchanged sentences
As is typical in our industry, we continually face risks associated with litigation of various types, including disputes relating to insurance claims under our policies as well as other general commercial and corporate litigation.
−Removed: Although we are not currently involved in any material litigation with our customers, other members of the insurance industry are the target of class action lawsuits and other types of litigation, some of which involve claims for substantial or indeterminate amounts, and the outcomes of which are unpredictable.
+Added: We could become involved in litigation with our customers, or become the target of class action lawsuits and other types of litigation, some of which involve claims for substantial or indeterminate amounts, and the outcomes of which are unpredictable.
This litigation may be based on a variety of issues, including insurance and claim settlement practices.
14 unchanged sentences
Our investment portfolio is subject to increased valuation uncertainties when investment markets are illiquid.
−Removed: The valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair
−Removed: value (i.e., the carrying amount) of the securities we hold in our portfolio does not reflect prices at which actual transactions would occur.
+Added: The valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value (i.e., the carrying amount) of the securities we hold in our portfolio does not reflect prices at which actual transactions would occur.
We also invest in marketable equity securities.
26 unchanged sentences
Best not lower than an A-.
−Removed: A breach of any of these covenants could result in acceleration of
−Removed: our obligations to repay our outstanding indebtedness under such agreements if we are unable to obtain a waiver or amendment from our lenders, and otherwise could impair our ability to borrow funds or result in higher borrowing costs.
+Added: A breach of any of these covenants could result in acceleration of our obligations to repay our outstanding indebtedness under such agreements if we are unable to obtain a waiver or amendment from our lenders, and otherwise could impair our ability to borrow funds or result in higher borrowing costs.
We may require additional capital in the future, which may not be available or may only be available on unfavorable terms.
35 unchanged sentences
We are unable to predict whether any legislation will be enacted or any regulations will be adopted, or the effect any such developments could have on our business, financial condition or results of operations.
−Removed: Unresolved Staff Comments
−Removed: We own our executive and insurance offices located in Richmond, Virginia, and we currently occupy approximately 80,000 square feet of the 137,000 square feet of available office space.
−Removed: We believe that our facilities are adequate for our current needs.
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.