REINSURANCE

12 Months Ended

Dec. 31, 2024

In the normal course of business, the Company purchases facultative and treaty reinsurance protection to limit ultimate losses and reduce loss aggregation risk.

Facultative reinsurance provides cover for all or a portion of the losses incurred for a single policy and the Company separately negotiates each facultative contract.

Treaty reinsurance provides cover for a specified type or category of risks. The Company's treaty reinsurance agreements provide this cover on either an excess of loss or a proportional basis. Excess of loss covers provide a contractually set amount of coverage after a specified loss amount has been reached. These treaties can provide cover for a number of lines of business within one contract. Under proportional reinsurance, the Company cedes an agreed percentage of the premiums and the losses and loss expenses on the policies it underwrites. These treaties provide the Company with a specified percentage of coverage from the first dollar of loss.

All of these reinsurance contracts provide the Company with the right to recover a specified amount of losses and loss expenses from reinsurers. To the extent that reinsurers do not meet their obligations under these agreements due to solvency issues, contractual disputes over contract language or coverage and/or other reasons, the Company remains liable.

The following table presents gross and net premiums written and earned:



Year ended December 31,	2024				2023				2022
	Premiums written		Premiums earned		Premiums written		Premiums earned		Premiums written		Premiums earned

Gross	$	9,005,888	$	8,529,567	$	8,356,525	$	7,973,577	$	8,214,595	$	7,936,382
Ceded	(3,248,537)		(3,223,332)		(3,254,200)		(2,889,796)		(2,951,539)		(2,776,056)
Net	$	5,757,351	$	5,306,235	$	5,102,325	$	5,083,781	$	5,263,056	$	5,160,326

For the year ended December 31, 2024, the Company recognized ceded losses and loss expenses of $2,039 million (2023: $1,754 million; 2022: $1,754 million).

At December 31, 2024, the Company’s reinsurance recoverable on unpaid and paid losses and loss expenses was $7.4 billion (2023: $6.9 billion).

At December 31, 2024, the Company's allowance for expected credit losses to be recognized over the life of the Company’s reinsurance recoverables balance was $43 million (2023: $37 million; 2022: $31 million).

The following table provides a reconciliation of the beginning and ending balances of the allowance for expected credit losses related to the Company’s reinsurance recoverable balance:



Year ended December 31,	2024		2023

Beginning balance	$	36,611	$	30,715
Increase (decrease) in allowance for expected credit losses	6,834		5,896
Ending Balance	$	43,445	$	36,611

Loss Portfolio Transfer Reinsurance Agreement

On December 13, 2024, the Company entered into a loss portfolio transfer reinsurance agreement with Cavello Bay Reinsurance Limited, a wholly-owned subsidiary of Enstar Group Limited ("Enstar") to retrocede a portfolio of reinsurance business predominantly related to 2021 and prior underwriting years (refer to Note 18 'Related Party Transactions'). The transaction is subject to regulatory approvals and other customary conditions and is expected to close during the first half of 2025.

The transaction is structured as a 75% ground-up quota share retrocession of net reserves for losses and loss expenses of approximately $3.1 billion at September 30, 2024 and provides cover up to a policy limit of approximately $940 million. Pursuant to the LPT Agreement, the Company will maintain responsibility for claims management subject to certain administrative rights of Enstar and will enter into collateral agreements with the Reinsurer under which the Company may be obligated to maintain certain types of eligible assets as partial collateral securing the Reinsurer’s obligations with respect to the Subject Business.

The transaction is deemed to have met the established criteria for retroactive reinsurance accounting.