The Company cedes a portion of its homeowners’ insurance exposure to other entities under catastrophe excess of loss reinsurance contracts and a portion of its flood insurance exposure under one quota share reinsurance agreement. Ceded premiums under most catastrophe excess of loss reinsurance contracts are subject to revision resulting from subsequent adjustments in total insured value. Under the terms of the quota share reinsurance agreement, the Company is entitled to a 30% ceding commission on ceded premiums written and a profit commission equal to 10% of net profit.

The Company remains liable for claims payments in the event that any reinsurer is unable to meet its obligations under the reinsurance agreements. Failure of reinsurers to honor their obligations could result in losses to the Company. 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 to minimize its exposure to significant losses from reinsurer insolvencies. The Company contracts with a number of reinsurers to secure its annual reinsurance coverage, which generally becomes effective June 1st of each year. The Company purchases reinsurance each year taking into consideration probable maximum losses and reinsurance market conditions.

The impact of the reinsurance contracts on premiums written and earned is as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Premiums Written:
Direct	$	284,289		$	179,983		$	496,184		$	387,406
Assumed		22,613			—			65,704			(7,569	)
Gross written		306,902			179,983			561,888			379,837
Ceded		(76,713	)		(66,390	)		(144,819	)		(136,899	)
Net premiums written	$	230,189		$	113,593		$	417,069		$	242,938
Premiums Earned:
Direct	$	201,791		$	181,946		$	391,466		$	354,851
Assumed		61,770			—			128,739			7,163
Gross earned		263,561			181,946			520,205			362,014
Ceded		(76,713	)		(66,390	)		(144,819	)		(136,899	)
Net premiums earned	$	186,848		$	115,556		$	375,386		$	225,115

During the three and six months ended June 30, 2024, the Company recognized ceded losses of $2,672 in each period as reductions in losses and loss adjustment expenses. During the three and six months ended June 30, 2023, the Company recognized ceded losses of $1,109 and $3,860, respectively, as reductions in losses and loss adjustment expenses. At June 30, 2024 and December 31, 2023, there were 44 and 33 reinsurers, respectively, participating in the Company’s reinsurance program. Total net amounts recoverable and receivable from reinsurers at June 30, 2024 and December 31, 2023 were $303,162 and $350,294, respectively. Approximately 71.4% of the reinsurance recoverable balance at June 30, 2024 was receivable from six reinsurers. Based on all available information considered in the rating-based method, the Company recognized decreases in credit loss expense of $3 and $52 for the three and six months ended June 30, 2024, respectively. For the three and six months ended June 30, 2023, the Company recognized decreases in credit loss expense of $101 and $102, respectively. Allowances for credit losses related to the reinsurance recoverable balance were $66 and $118 at June 30, 2024 and December 31, 2023, respectively.

One of the existing reinsurance contracts includes retrospective provisions that adjust premiums in the event losses are minimal or zero. For the three and six months ended June 30, 2024, the Company recognized reductions in premiums ceded of $6,993 and $13,986, respectively, related to these adjustments in the consolidated statements of income. For the three and six months ended June 30, 2023, the Company recognized reductions in premiums ceded of $6,993 and $13,986, respectively. See Note 21 -- “Commitments and Contingencies” for additional information.

Amounts receivable pursuant to retrospective provisions are reflected in other assets. At June 30, 2024 and December 31, 2023, other assets included $58,275 and $44,289, respectively, of amounts receivable pursuant to retrospective provisions. Management believes the credit risk associated with the collectability of these accrued benefits is minimal as the amount receivable is concentrated with one reinsurer with a good credit rating and the Company monitors the creditworthiness of this reinsurer based on available information about the reinsurer’s financial condition.

From 2021 to 2022, the Company, through HCPCI and TypTap, provided quota share reinsurance on all in-force, new and renewal policies issued by United Property & Casualty Insurance Company, an insurance subsidiary of United Insurance Holdings Corporation (“United”), in the states of Connecticut, New Jersey, Massachusetts, and Rhode Island (collectively “Northeast Region”). From 2022 to 2023, the Company’s insurance subsidiaries also provided quota share reinsurance on all of United’s personal lines insurance business in the states of Georgia, North Carolina, and South Carolina (collectively “Southeast Region”). In conjunction with these reinsurance agreements, the Company entered into renewal rights agreements with United which provided the Company with the right to renew and/or replace United’s insurance policies at the end of their respective policy periods. In February 2023, United’s Florida-domiciled residential insurance subsidiary was placed into receivership by the State of Florida due to its financial insolvency and, as a result, the Company ceased providing quota share reinsurance on United policies. The majority of the policies under these reinsurance agreements have been renewed and/or replaced by the Company.

At June 30, 2024 and December 31, 2023, the Company had a net balance of $582 due to United related to the Northeast Region, representing ceding commission payable.

For the three and six months ended June 30, 2023, $0 and $7,569, respectively, of assumed premiums written related to the Southeast Region’s insurance policies were derecognized, which primarily resulted from the return of the unearned portion of assumed written premiums subsequent to the Company’s renewal and/or replacement of insurance policies in the Southeast Region. At June 30, 2024, the Company had a net balance of $1,438 due to United related to the Southeast Region, consisting of premiums payable of $1,712 offset by ceding commission receivable of $274. At December 31, 2023, the Company had a net balance of $4,203 due to United related to the Southeast Region, consisting of premiums payable of $1,712 and payable on paid losses and loss adjustment expenses of $2,765, offset by ceding commission receivable of $274.

At June 30, 2024, the Company had a net amount due to United of $2,020 and funds withheld for assumed business in trust accounts totaling $14,353 for the benefit of policies assumed from United. The Company ceased providing TPA services to United in March 2023. The Company cannot predict the actions a receiver might take, which may include restrictions on, or use of, funds held in trust. Any such actions could have a material adverse effect on the Company’s financial position and results of operations.

At June 30, 2024 and December 31, 2023, the balance of funds withheld for assumed business related to the Company’s quota share reinsurance agreements with United was $14,353 and $30,087, respectively.

Assumed premiums written related to Citizens policies were $22,613 and $65,704 for the three and six months ended June 30, 2024, respectively, in comparison with $0 for the three and six months ended June 30, 2023.