Reinsurance

12 Months Ended

Dec. 31, 2025

The Company cedes certain premiums and losses to various reinsurers under excess-of-loss treaties. These reinsurance arrangements provide for greater diversification of business, allow management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. Ceded reinsurance contracts do not relieve the Company from its obligations to policyholders. The Company remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreements. To minimize its exposure to significant losses from reinsurer insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers on a continual basis. The effect of reinsurance on premiums written and earned in 2025, 2024 and 2023 was as follows:


	2025 Premiums						2024 Premiums						2023 Premiums
	Written			Earned			Written			Earned			Written			Earned
	(in thousands)
Gross	$	313,864		$	300,287		$	294,144		$	288,803		$	285,355		$	283,746
Ceded		(17,230	)		(17,230	)		(18,164	)		(18,164	)		(16,621	)		(16,621	)
Net premiums	$	296,634		$	283,057		$	275,980		$	270,639		$	268,734		$	267,125

The amounts recoverable from reinsurers consist of the following:


	December 31,
	2025			2024
	(in thousands)
Unpaid losses recoverable:
Case basis	$	63,355		$	73,421
Incurred but not reported		42,720			39,321
Paid losses recoverable		641			3,664
Experience-rated commissions recoverable		1,646			913
Allowance for credit losses		(264	)		(300	)
Total	$	108,098		$	117,019

Amounts recoverable from reinsurers consist of ceded case reserves, ceded incurred but not reported (IBNR) reserves, and paid losses recoverable. Ceded case reserves and ceded IBNR reserves represent the portion of gross loss and loss adjustment expense liabilities that are recoverable under reinsurance agreements, but are not yet due from reinsurers. Paid losses recoverable are receivables currently due from reinsurers for ceded paid losses. The Company considers paid losses recoverable outstanding for more than 90 days to be past due. At December 31, 2025, there were no paid losses recoverable past due.

The Company received reinsurance recoveries of $1.8 million in 2025, $0.3 million in 2024 and $16.0 million in 2023.

The Company generally secures large reinsurance recoverable balances with various forms of collateral, including funds withheld accounts, irrevocable letters of credit and secured trusts. At December 31, 2025, reinsurance recoverables from reinsurers that exceeded 1.5% of statutory surplus of the Company’s insurance subsidiaries are shown below.


Reinsurer		A.M. Best Rating	Amounts Recoverable as of December 31, 2025
			(in thousands)
Hannover Reinsurance Ireland Limited	(1)	A+	$	41,924
Arch Reinsurance Company	(1)	A+		27,750
Munich Reinsurance America, Inc	(1)	A+		10,179
Minnesota Workers' Compensation Reinsurance Association	(1)	NR		8,758
Allianz Risk Transfer AG (Bermuda)		A+		3,525
Odyssey America Reinsurance Corporation		A+		3,411
Other reinsurers				12,815
Total amounts recoverable from reinsurers				108,362
Allowance for credit losses				(264	)
Total amounts recoverable from reinsurers net of allowance for credit losses				108,098
Funds withheld and letters of credit related to the above recoverables				(63,886	)
Total unsecured amounts recoverable from reinsurers			$	44,212

(1)

Current participant in our 2026 reinsurance program.

The table below presents the change in the allowance for credit losses on amounts recoverable from reinsurers for the years ended December 31, 2025 and 2024.


	Year Ended
	December 31,
	2025			2024

Balance, beginning of period	$	300		$	360
Provision for credit loss benefit		(36	)		(60	)
Balance, end of period	$	264		$	300