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Premiums Written and Earned
 12 Months Ended
Dec. 31, 2019
Insurance [Abstract]  
PREMIUMS WRITTEN AND EARNED 8. REINSURANCE BALANCES RECOVERABLE ON PAID AND UNPAID LOSSES
The following table provides the total reinsurance balances recoverable on paid and unpaid losses as of December 31, 2019 and 2018:
 
 
2019
 
 
Non-life
Run-off
 
Atrium
 
StarStone
 
Total
Recoverable from reinsurers on unpaid:
 
 
 
 
 
 
 
 
Outstanding losses
 
$
972,293

 
$
9,011

 
$
328,009

 
$
1,309,313

IBNR
 
673,059

 
19,286

 
211,404

 
903,749

Fair value adjustments - acquired companies
 
(13,652
)
 
519

 
(2,122
)
 
(15,255
)
Fair value adjustments - fair value option
 
(88,086
)
 
—

 
—

 
(88,086
)
Total reinsurance reserves recoverable
 
1,543,614

 
28,816

 
537,291

 
2,109,721

Paid losses recoverable
 
181,375

 
1,541

 
87,253

 
270,169

Total
 
$
1,724,989

 
$
30,357

 
$
624,544

 
$
2,379,890

 
 
 
 
 
 
 
 
 
Reconciliation to Consolidated Balance Sheet:
 
 
 
 
 
 
 
 
Reinsurance balances recoverable on paid and unpaid losses
 
$
1,029,471

 
$
30,357

 
$
624,544

 
$
1,684,372

Reinsurance balances recoverable on paid and unpaid losses - fair value option
 
695,518

 
—

 
—

 
695,518

Total
 
$
1,724,989

 
$
30,357

 
$
624,544

 
$
2,379,890

 
 
2018
 
 
Non-life
Run-off
 
Atrium
 
StarStone
 
Total
Recoverable from reinsurers on unpaid:
 
 
 
 
 
 
 
 
Outstanding losses
 
$
901,772

 
$
18,891

 
$
263,065

 
$
1,183,728

IBNR
 
609,434

 
19,247

 
201,784

 
830,465

Fair value adjustments - acquired companies
 
(14,344
)
 
630

 
(1,899
)
 
(15,613
)
Fair value adjustments - fair value option
 
(130,739
)
 
—

 
—

 
(130,739
)
Total reinsurance reserves recoverable
 
1,366,123

 
38,768

 
462,950

 
1,867,841

Paid losses recoverable
 
138,265

 
(256
)
 
23,813

 
161,822

Total
 
$
1,504,388

 
$
38,512

 
$
486,763

 
$
2,029,663

 
 
 
 
 
 
 
 
 
Reconciliation to Consolidated Balance Sheet:
 
 
 
 
 
 
 
 
Reinsurance balances recoverable on paid and unpaid losses
 
$
764,797

 
$
38,512

 
$
486,763

 
$
1,290,072

Reinsurance balances recoverable on paid and unpaid losses - fair value option
 
739,591

 
—

 
—

 
739,591

Total
 
$
1,504,388

 
$
38,512

 
$
486,763

 
$
2,029,663


Our insurance and reinsurance run-off subsidiaries and assumed portfolios, prior to acquisition, used retrocessional agreements to reduce their exposure to the risk of insurance and reinsurance assumed. On an annual basis, both Atrium and StarStone purchase a tailored outwards reinsurance program designed to manage their risk profiles. The majority of Atrium’s and StarStone's third-party reinsurance cover is with highly rated reinsurers or is collateralized by pledged assets or letters of credit.
The fair value adjustments, determined on acquisition of insurance and reinsurance subsidiaries, are based on the estimated timing of loss and LAE recoveries and an assumed interest rate equivalent to a risk free rate for securities with similar duration to the acquired reinsurance balances recoverable on paid and unpaid losses plus a spread to reflect credit risk, and are amortized over the estimated recovery period, as adjusted for accelerations in timing of payments as a result of commutation settlements. The determination of the fair value adjustments on the retroactive reinsurance contracts for which we have elected the fair value option is described in Note 12 - "Fair Value Measurements".
As of December 31, 2019 and 2018, we had reinsurance balances recoverable on paid and unpaid losses of approximately $2,379.9 million and $2,029.7 million, respectively. The increase of $350.2 million in reinsurance balances recoverable on paid and unpaid losses was primarily due to the AmTrust RITC and Zurich reinsurance transactions, which closed during the first and fourth quarters of 2019, respectively, and reserve increases in StarStone and our non-life run-off segment, offset by commutations and cash collections made during the year ended December 31, 2019.
Top Ten Reinsurers
 
December 31, 2019
 
December 31, 2018
 
Non-life
Run-off
 
Atrium
 
StarStone
 
Total
 
% of
Total
 
Non-life
Run-off
 
Atrium
 
StarStone
 
Total
 
% of
Total
Top ten reinsurers
$
1,154,110

 
$
22,051

 
$
388,171

 
$
1,564,332

 
65.7
%
 
$
1,124,079

 
$
25,239

 
$
263,192

 
$
1,412,510

 
69.6
%
Other reinsurers > $1 million
551,636

 
7,761

 
233,871

 
793,268

 
33.4
%
 
364,098

 
12,091

 
220,123

 
596,312

 
29.4
%
Other reinsurers < $1 million
19,243

 
545

 
2,502

 
22,290

 
0.9
%
 
16,211

 
1,182

 
3,448

 
20,841

 
1.0
%
Total
$
1,724,989

 
$
30,357

 
$
624,544

 
$
2,379,890

 
100.0
%
 
$
1,504,388

 
$
38,512

 
$
486,763

 
$
2,029,663

 
100.0
%
 
December 31, 2019

 
December 31, 2018

Information regarding top ten reinsurers:
 
 
 
Number of top 10 reinsurers rated A- or better
8

 
7

Number of top 10 non-rated reinsurers (1)
2

 
3

 
 
 
 
Recoverables rated A- or better in top 10
$
1,292,207

 
$
1,096,272

Collaterized non-rated reinsurers recoverables in top 10 (1)
272,125

 
316,238

 
$
1,564,332

 
$
1,412,510

 
 
 
 
Single reinsurers that represent 10% or more of total reinsurance balance recoverables as of December 31, 2019:
 
 
 
 
 
 
 
Hannover Ruck SE (2)
$
261,295

 
$
279,723

Lloyd's Syndicates (3)
$
411,030

 
$
334,509

(1) For the two non-rated reinsurers as of December 31, 2019 and three non-rated reinsurers as at December 31, 2018, we hold security in the form of pledged assets in trust or letters of credit issued to us in the full amount of the recoverable.
(2) Hannover Ruck SE is rated AA- by Standard & Poor’s and A+ by A.M. Best.
(3) Lloyd's Syndicates are rated A+ by Standard & Poor's and A by A.M. Best.
 Provisions for Uncollectible Reinsurance Balances Recoverable on Paid and Unpaid Losses
We evaluate and monitor concentration of credit risk among our reinsurers. Provisions are made for amounts considered potentially uncollectible.
The following table shows our reinsurance balances recoverable on paid and unpaid losses by rating of reinsurer and our provisions for uncollectible reinsurance balances recoverable on paid and unpaid losses ("provisions for bad debt") as of December 31, 2019 and 2018. The majority of the provisions for bad debt relate to the Non-life Run-off segment.
 
2019
 
2018
 
Gross
 
Provisions for Bad Debt
 
Net
 
Provisions as a
% of Gross
 
Gross
 
Provisions for Bad Debt
 
Net
 
Provisions as a
% of Gross
Reinsurers rated A- or above
$
1,904,268

 
$
43,427

 
$
1,860,841

 
2.3
%
 
$
1,612,464

 
$
51,519

 
$
1,560,945

 
3.2
%
Reinsurers rated below A-, secured
487,608

 
—

 
487,608

 
—
%
 
430,852

 
—

 
430,852

 
—
%
Reinsurers rated below A-, unsecured
135,653

 
104,212

 
31,441

 
76.8
%
 
143,079

 
105,213

 
37,866

 
73.5
%
Total
$
2,527,529

 
$
147,639

 
$
2,379,890

 
5.8
%
 
$
2,186,395

 
$
156,732

 
$
2,029,663

 
7.2
%

13. PREMIUMS WRITTEN AND EARNED
The following tables provide a summary of net premiums written and earned for the years ended December 31, 2019, 2018 and 2017:
 
2019
 
2018
 
2017
 
Premiums
Written
 
Premiums
Earned
 
Premiums
Written
 
Premiums
Earned
 
Premiums
Written
 
Premiums
Earned
Non-life Run-off
 
 
 
 
 
 
 
 
 
 
 
Gross
$
(25,069
)
 
$
197,009

 
$
(8,910
)
 
$
25,230

 
$
14,102

 
$
23,950

Ceded
(269
)
 
(28,513
)
 
(307
)
 
(15,803
)
 
(7,620
)
 
(9,788
)
Net
$
(25,338
)
 
$
168,496

 
$
(9,217
)
 
$
9,427

 
$
6,482

 
$
14,162

Atrium
 
 
 
 
 
 
 
 
 
 
 
Gross
$
192,373

 
$
182,678

 
$
171,494

 
$
164,428

 
$
153,472

 
$
152,278

Ceded
(20,017
)
 
(18,619
)
 
(18,006
)
 
(18,113
)
 
(19,258
)
 
(17,531
)
Net
$
172,356

 
$
164,059

 
$
153,488

 
$
146,315

 
$
134,214

 
$
134,747

StarStone
 
 
 
 
 
 
 
 
 
 
 
Gross
$
917,555

 
$
1,021,827

 
$
1,121,135

 
$
1,010,816

 
$
895,160

 
$
865,159

Ceded
(182,126
)
 
(219,901
)
 
(315,573
)
 
(295,857
)
 
(430,259
)
 
(405,756
)
Net
$
735,429

 
$
801,926

 
$
805,562

 
$
714,959

 
$
464,901

 
$
459,403

Other
 
 
 
 
 
 
 
 
 
 
 
Gross
$
18,534

 
$
20,544

 
$
32,378

 
$
25,237

 
$
5,719

 
$
5,900

Ceded
(22
)
 
(164
)
 
(311
)
 
(363
)
 
(926
)
 
(1,091
)
Net
$
18,512

 
$
20,380

 
$
32,067

 
$
24,874

 
$
4,793

 
$
4,809

Total
 
 
 
 
 
 
 
 
 
 
 
Gross
$
1,103,393

 
$
1,422,058

 
$
1,316,097

 
$
1,225,711

 
$
1,068,453

 
$
1,047,287

Ceded
(202,434
)
 
(267,197
)
 
(334,197
)
 
(330,136
)
 
(458,063
)
 
(434,166
)
Net
$
900,959

 
$
1,154,861

 
$
981,900

 
$
895,575

 
$
610,390

 
$
613,121


Gross premiums written for the year ended December 31, 2019 and 2018 were $1,103.4 million and $1,316.1 million, respectively, a decrease of $212.7 million. The decrease was primarily due to a decrease in gross written premiums in our StarStone segment due to our strategy to exit certain lines of business, and reductions in gross written premiums in our Non-life Run-off segment due to unearned premium acquired in various transactions.