Our consolidated balance sheets include a substantial amount of assets and liabilities whose fair values are subject to market risk. The term market risk refers to the risk of loss arising from adverse changes in interest rates, credit spreads, equity markets prices, and other relevant market rates and prices. Due to our sizable investment portfolio, market risk can have a significant effect on our consolidated financial position. We believe we are principally exposed to the following types of market risk: ▪interest rate risk; and ▪foreign currency exchange risk. 55 Interest Rate Risk Interest rate risk is the price sensitivity of a security to changes in interest rates. Our investment portfolio includes fixed income investments, whose fair values will fluctuate with changes in interest rates. Increases and decreases in prevailing interest rates generally translate into decreases and increases in fair values of fixed income investments, respectively. Additionally, fair values of interest rate sensitive instruments may be affected by the creditworthiness of the issuer, prepayment options, relative values of alternative investments, the liquidity of the instrument, and other market factors. We manage the interest rate risk associated with our portfolio of fixed income investments by matching assets backing reserves with that of our economic liabilities, in addition to monitoring the average yield of investment-grade corporate securities; U.S. government and agency securities; foreign government, agency and provincial obligations; preferred stocks; asset-backed and mortgage-backed securities; and municipal obligations. The following table summarizes the estimated effects of hypothetical increases and decreases in market interest rates on our debt securities as of June 30, 2026: Fair value Assumed change in interest rate Estimated fair value after change in interest rate Pre-tax increase (decrease) in carrying value ($ in millions) Debt securities $ 5,221.7 300 bp decrease $ 5,672.2 $ 450.5 200 bp decrease 5,519.1 297.4 100 bp decrease 5,366.0 144.3 50 bp decrease 5,289.4 67.7 50 bp increase 5,132.4 (89.3) 100 bp increase 5,051.7 (170.0) 200 bp increase 4,889.2 (332.5) 300 bp increase $ 4,725.4 $ (496.3) The magnitude of the fair value decrease in rising rates scenarios may be more significant than the fair value increase in comparable falling rates scenarios. This can occur because (i) the analysis floors interest rates at a de minimis level in falling rate scenarios, muting price increases, (ii) portions of the fixed income investment portfolio may be callable, muting price increases in falling interest rate scenarios and/or (iii) portions of the fixed income investment portfolio may experience cash flow extension in higher interest rate environments, which generally results in lower fixed income asset prices. Interest payments on our 2017 SEK Subordinated Notes are required to be serviced in Swedish kronor by reference to Stockholm Interbank Offered Rate, a floating interest rate benchmark. This benchmark rate has increased year to date and it is possible that it will continue to do so, which could result in increasing our interest expense in U.S. dollars. Foreign Currency Exchange Risk In the ordinary course of business, we hold non-U.S. dollar denominated assets and liabilities, which are valued using period-end exchange rates. Non-U.S. dollar denominated foreign revenues and expenses are valued using average exchange rates over the period. Foreign currency exchange-rate risk is the risk that we will incur losses on a U.S. dollar basis due to adverse changes in foreign currency exchange rates. We aim to mitigate foreign currency exchange risk through the use of foreign currency forwards. Refer to Note 8 “Derivatives” to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information on foreign currency hedging. 56 The following table, presented net of currency hedges, summarizes the estimated effects of a hypothetical 10% increase and decrease in the value of the U.S. dollar against select foreign currencies would have had on the carrying value of our net assets as of June 30, 2026: 10% increase 10% decrease ($ in millions) Swedish Krona to U.S. Dollar $ (2.7) $ 2.7 British Pound to U.S. Dollar (0.4) 0.4 Swiss Franc to U.S. dollar (0.1) 0.1 Euro to U.S. Dollar (2.2) 2.2 Canadian Dollar to U.S. Dollar $ 1.0 $ (1.0)