Reinsurance and Insurance Loss Reserves

12 Months Ended

Apr. 02, 2022

Standard Casualty is primarily a specialty writer of manufactured home physical damage insurance. Certain of our premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The ceded reinsurance agreements provide increased capacity to write larger risks while maintaining exposure to loss within our capital resources. We remain obligated for amounts ceded in the event that the reinsurers do not meet their obligations. Substantially all of the assumed reinsurance is with one entity.

The effects of reinsurance on premiums written and earned were as follows (in thousands):


	Year Ended
	April 2, 2022				April 3, 2021
	Written		Earned		Written		Earned
Direct premiums	$	27,639	$	25,543	$	23,226	$	21,424
Assumed premiums—nonaffiliated	31,693		30,579		29,167		28,160
Ceded premiums—nonaffiliated	(15,232)		(15,232)		(12,604)		(12,604)
	$	44,100	$	40,890	$	39,789	$	36,980

Typical insurance policies written or assumed have a maximum coverage of $300,000 per claim, of which we cede $125,000 of the risk of loss per reinsurance. Therefore, our risk of loss is limited to $175,000 per claim on typical policies, subject to the reinsurers meeting their obligations. After this limit, amounts are recoverable through reinsurance for catastrophic losses in excess of $2.0 million per occurrence, up to a maximum of $70.0 million in the aggregate for that occurrence.

Purchasing reinsurance contracts mitigates the frequency and/or severity of losses incurred on insurance policies issued, such as in the case of a catastrophe that generates a large number of serious claims on multiple policies at the same time. Under these agreements, we may be required to repurchase and reestablish the reinsurance contracts for the remainder of the year to the extent that they have been utilized.

Standard Casualty establishes reserves for claims and claims expense on reported and IBNR claims of non-reinsured losses. The following details the activity in the reserve for fiscal years 2022, 2021 and 2020 (in thousands):


	April 2, 2022		April 3, 2021		March 28, 2020
Balance at beginning of period	$	7,451	$	5,582	$	6,686
Net incurred losses during the year	25,962		23,041		16,961
Net claim payments during the year	(25,264)		(21,172)		(18,065)
Balance at end of period	$	8,149	$	7,451	$	5,582