Note 5 - Reinsurance

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Reinsurance [Text Block]

5. REINSURANCE

In the ordinary course of business, the Company assumes and cedes premiums and selected insured risks with other insurance companies, known as reinsurance. A large portion of the reinsurance is put into effect under contracts known as treaties and, in some instances, by negotiation on each individual risk (known as facultative reinsurance). In addition, there are several types of treaties including quota share, excess of loss, and catastrophe reinsurance contracts that protect against losses over stipulated amounts arising from any one occurrence or event. The arrangements allow the Company to pursue greater diversification of business and serve to limit the maximum net loss to a single event, such as a catastrophe. Through the quantification of exposed policy limits in each region and the extensive use of computer-assisted modeling techniques, management monitors the concentration of risks exposed to catastrophic events.

Through the purchase of reinsurance, the Company also generally limits its net loss on any individual risk to a maximum of $1,000,000 for casualty and workers’ compensation business and $1,000,000 for property, although certain treaties contain an annual aggregate deductible before reinsurance applies.

Premiums, written and earned, along with losses and settlement expenses incurred for the periods presented is summarized as follows:

	Three-Month Periods Ended June 30,
	2024			2023
WRITTEN
Direct	$	25,390,896		$	23,589,667
Reinsurance assumed		(24,174	)		36,387
Reinsurance ceded		(3,680,899	)		(2,654,089	)
Net	$	21,685,823		$	20,971,965
EARNED
Direct	$	24,077,573		$	21,167,168
Reinsurance assumed		(14,213	)		31,109
Reinsurance ceded		(3,665,167	)		(2,704,224	)
Net	$	20,398,193		$	18,494,053
LOSS AND SETTLEMENT EXPENSES INCURRED
Direct	$	14,420,431		$	12,633,975
Reinsurance assumed		(40,615	)		31,178
Reinsurance ceded		173,252			(450,667	)
Net	$	14,553,068		$	12,214,486

	Six-Month Periods Ended June 30,
	2024			2023
WRITTEN
Direct	$	49,126,455		$	44,404,193
Reinsurance assumed		23,602			75,113
Reinsurance ceded		(7,020,230	)		(4,994,729	)
Net	$	42,129,827		$	39,484,577
EARNED
Direct	$	47,622,577		$	41,410,604
Reinsurance assumed		33,407			72,811
Reinsurance ceded		(7,035,425	)		(5,188,065	)
Net	$	40,620,559		$	36,295,350
LOSS AND SETTLEMENT EXPENSES INCURRED
Direct	$	28,539,882		$	25,900,404
Reinsurance assumed		23,107			40,419
Reinsurance ceded		(1,672,993	)		(2,678,656	)
Net	$	26,889,996		$	23,262,167