Reinsurance

12 Months Ended

Dec. 31, 2024

Reinsurance Disclosures [Abstract]

Reinsurance

4. REINSURANCE

In the ordinary course of business, our insurance subsidiaries assume and cede premiums and selected insured risks with other insurance companies, known as reinsurance. 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, we monitor the concentration of risks exposed to catastrophic events.

Through the purchase of reinsurance, we also limit our net loss on any individual risk to a maximum of $12 million, although retentions can vary.

Premiums written and earned along with losses and settlement expenses incurred for the years ended December 31 are summarized as follows:

(in thousands)	2024		2023		2022
WRITTEN
Direct	$	1,986,046	$	1,783,862	$	1,531,656
Reinsurance assumed		27,002		22,798		33,830
Reinsurance ceded		(407,527)		(378,913)		(323,950)
Net	$	1,605,521	$	1,427,747	$	1,241,536
EARNED
Direct	$	1,895,065	$	1,671,044	$	1,425,165
Reinsurance assumed		26,170		28,375		35,680
Reinsurance ceded		(394,829)		(405,113)		(316,409)
Net	$	1,526,406	$	1,294,306	$	1,144,436
LOSSES AND SETTLEMENT EXPENSES INCURRED
Direct	$	954,952	$	840,255	$	776,448
Reinsurance assumed		7,945		10,228		22,813
Reinsurance ceded		(223,644)		(246,070)		(284,885)
Net	$	739,253	$	604,413	$	514,376

More than 93 percent of our reinsurance balances recoverable are due from companies with financial strength ratings of A or better by AM Best and S&P rating services. The following table displays net reinsurance balances recoverable, after consideration of collateral, from our top reinsurers as of December 31, 2024. These reinsurers all have financial strength ratings of A or better by AM Best and S&P’s ratings services. Also shown are the amounts of written premium ceded to these reinsurers during the calendar year 2024.

			Net Reinsurer				Ceded
	AM Best	S&P	Exposure as of		Percent of		Premiums		Percent of
(dollars in thousands)	Rating	Rating	12/31/2024		Total		Written		Total
Munich Re / HSB	A+, Superior	AA, Very Strong	$	110,302	13.2	%	$	31,258	7.7	%
Renaissance Re	A+, Superior	A+, Strong		82,385	9.9	%		31,467	7.7	%
Nationwide Mutual	A, Excellent	A+, Strong		62,278	7.5	%		24,028	5.9	%
Partner Re	A+, Superior	A+, Strong		60,818	7.3	%		37,581	9.2	%
Safety National	A++, Superior	A+, Strong		36,475	4.4	%		6,303	1.6	%
Everest Re	A+, Superior	A+, Strong		36,252	4.3	%		29,454	7.2	%
Odyssey America Re	A+, Superior	A+, Strong		33,730	4.0	%		8,916	2.2	%
Berkley Insurance Co.	A+, Superior	A+, Strong		32,754	3.9	%		7,626	1.9	%
General Re	A++, Superior	AA+, Very Strong		32,120	3.8	%		14,809	3.6	%
Aspen UK Ltd.	A, Excellent	A-, Strong		31,240	3.7	%		9,116	2.2	%
Toa Re	A, Excellent	A, Strong		30,800	3.7	%		13,882	3.4	%
All other reinsurers*				287,139	34.3	%		193,087	47.4	%
Total ceded exposure			$	836,293	100.0	%	$	407,527	100.0	%

* All other reinsurance balances recoverable, when considered by individual reinsurer, are less than 2 percent of shareholders’ equity.

The allowances for uncollectible amounts on paid and unpaid recoverables were $17 million and $10 million, respectively, at December 31, 2024 and $16 million and $11 million, respectively, at December 31, 2023. Changes in the allowances during 2024 were due to changes in the amount of reinsurance balances outstanding, the composition of reinsurers from whom the balances were recoverable and their associated S&P default ratings. Less than $1 million of write-offs were applied to the allowances in 2024 and less than $1 million was recovered.