Allowance for Credit Losses

3 Months Ended

Mar. 31, 2023

Premiums Receivable

The following table sets forth the changes in the allowance for expected credit losses for the three months ended March 31, 2023.


($ in thousands)	Allowance for Credit Losses
Balance at December 31, 2022	$	629
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023	—
Current period change for estimated uncollectible premiums	409
Write-offs of uncollectible premiums receivable	(56)
Balance at March 31, 2023	$	982

Reinsurance Recoverables

The Company analyzes the credit risk associated with its reinsurance recoverables by monitoring the financial strength rating of its reinsurers from A.M. Best, a widely recognized rating agency with an exclusive insurance industry focus. The Company assesses the financial strength rating annually and updated throughout the year as A.M. Best provides updates on ratings and outlooks. The Company assesses the adequacy of various forms of credit enhancements such as reinsurance payables, letters of credit and funds held. A summary of the Company’s reinsurance recoverables net of credit enhancements by A.M. Best rating as of March 31, 2023 was as follows:


A.M. Best Rating	March 31, 2023
A- and above	98.5	%
B++ to B+	1.4

Not rated	0.1

The Company considers reinsurance balances to be past due when it is 90 days past due. The following table sets forth the changes in the allowance for estimated uncollectible reinsurance for the three months ended March 31, 2023:


($ in thousands)	Allowance for Credit Losses
Balance at December 31, 2022	$	—
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023	2,295
Current period change for estimated uncollectible reinsurance	—

Balance at March 31, 2023	$	2,295