Reinsurance

6 Months Ended

Jun. 30, 2021

Reinsurance [Abstract]

Reinsurance

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 $750,000 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,
	2021		2020
WRITTEN
Direct	$	18,516,434	$	14,911,845
Reinsurance assumed		(34,245)		25,839
Reinsurance ceded		(2,898,257)		(3,215,430)
Net	$	15,583,932	$	11,722,254
EARNED
Direct	$	15,576,595	$	14,521,350
Reinsurance assumed		(26,862)		20,347
Reinsurance ceded		(2,816,926)		(3,166,951)
Net	$	12,732,807	$	11,374,746
LOSS AND SETTLEMENT EXPENSES INCURRED
Direct	$	12,038,753	$	18,072,820
Reinsurance assumed		(15,194)		11,818
Reinsurance ceded		(3,359,279)		(8,876,154)
Net	$	8,664,280	$	9,208,484

	Six-Month Periods Ended June 30,
	2021		2020
WRITTEN
Direct	$	33,688,469	$	29,706,379
Reinsurance assumed		(6,347)		63,373
Reinsurance ceded		(5,371,425)		(5,592,974)
Net	$	28,310,697	$	24,176,778
EARNED
Direct	$	30,058,645	$	29,884,164
Reinsurance assumed		11,960		65,296
Reinsurance ceded		(5,289,085)		(5,560,725)
Net	$	24,781,520	$	24,388,735
LOSSES AND SETTLEMENT EXPENSES INCURRED
Direct	$	22,806,187	$	26,834,499
Reinsurance assumed		10,251		38,336
Reinsurance ceded		(6,349,452)		(9,822,269)
Net	$	16,466,986	$	17,050,566