In the normal course of business, the Company's insurance subsidiaries assume and cede reinsurance with other insurers. Reinsurance is ceded primarily to limit losses from large events and to permit recovery of a portion of direct losses; however, such a transfer does not relieve the originating insurance company of primary liability.

The Company is a national underwriter and therefore has exposure to catastrophic losses in certain coastal states and other regions throughout the U.S. Catastrophes can be caused by various events including hurricanes, windstorms, hail, severe winter weather, wildfires and earthquakes, and the frequency and severity of catastrophes are inherently unpredictable. The financial impact from catastrophic losses results from both the total amount of insured exposure in the area affected by the catastrophe as well as the severity of the event. The Company seeks to reduce its exposure to catastrophe losses through the geographic diversification of its insurance coverage, deductibles, maximum coverage limits and the purchase of catastrophe reinsurance.

The Company's catastrophe losses incurred were approximately $80.0 million, $78.2 million and $84.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. For 2022, catastrophe losses were impacted by winter storm events, wind/hail/tornado and hurricane events.

The total amounts of reinsurance recoverable on unpaid insurance reserves classified as assets and included in the amounts being reported as Reinsurance balances receivable in the Consolidated Balance Sheets were as follows:


($ in millions)	December 31,
	2022		2021
Reinsurance recoverables on reserves and unpaid claims
Property & Casualty
Reinsurance companies	$	3.1	$	10.4
State insurance facilities	97.7		99.9
Group benefits	352.4		—
Life and health	9.3		9.3
Total	$	462.5	$	119.6

As of December 31, 2022, the Company had a reinsurance recoverable in the amount of $214.1 million from National Guardian Life Insurance Company (NGL) that exceeded 10.0% of consolidated shareholders' equity as of the reporting date. NGL currently has an assigned credit rating of A by A.M. Best.

The Company recognizes the cost of reinsurance premiums over the contract periods for such premiums in proportion to the insurance protection provided. Amounts recoverable from reinsurers for unpaid claims and claim settlement expenses, including estimated amounts for unsettled claims, IBNR claims and policy benefits, are estimated in a manner consistent with the insurance liability associated with the policy. The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows:


($ in millions)	Gross Amount		Ceded to Other Companies(1)		Assumed from Other Companies		Net Amount
Year Ended December 31, 2022
Net premiums written and contract deposits(2)	$	1,495.2	$	62.9	$	53.0	$	1,485.3
Net premiums and contract charges earned	1,048.0		72.0		53.0		1,029.0
Benefits, claims and settlement expenses	787.2		43.6		18.0		761.6

Year Ended December 31, 2021
Net premiums written and contract deposits(2)	1,370.1		23.1		9.4		1,356.4
Net premiums and contract charges earned	913.2		33.3		9.7		889.6
Benefits, claims and settlement expenses	619.3		7.8		6.2		617.7

Year Ended December 31, 2020
Net premiums written and contract deposits(2)	1,369.9		20.4		9.8		1,359.3
Net premiums and contract charges earned	949.6		28.8		9.9		930.7
Benefits, claims and settlement expenses	475.7		(86.2)		7.0		568.9

(2) This measure is not based on accounting principles generally accepted in the United States of America (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the SEC.

There were no losses from uncollectible reinsurance recoverables in the three years ended December 31, 2022. Past due reinsurance recoverables as of December 31, 2022 were not material.

The Company maintains property and casualty catastrophe excess of loss reinsurance coverage. For 2022, the Company's catastrophe excess of loss coverage consisted of one contract in addition to a minimal amount of coverage by the Florida Hurricane Catastrophe Fund (FHCF). The catastrophe excess of loss contract provided 95% coverage for catastrophe losses above a retention of $25.0 million per occurrence up to $175.0 million per occurrence. This contract consisted of three layers, each of which provided for one mandatory reinstatement. The layers were $25.0 million excess of $25.0 million, $40.0 million excess of $50.0 million and $85.0 million excess of $90.0 million.

For liability coverages, in 2022, the Company reinsured each loss above a retention of $5.0 million per occurrence up to $20.0 million in a clash event. A clash cover is a reinsurance casualty excess contract requiring two or more casualty coverages or policies issued by the Company to be involved in the same loss occurrence for coverage to apply.

The maximum individual life insurance risk retained by the Company is $0.5 million on any individual life, while either $0.1 million or $0.125 million is retained on each group life policy depending on the type of coverage. Excess amounts are reinsured. The Company also maintains a life catastrophe reinsurance program. For 2022, the Company reinsured 100% of the catastrophe risk in excess of $1.0 million up to $35.0 million per occurrence, with one reinstatement. The Company's life catastrophe risk reinsurance program covers acts of terrorism and includes nuclear, biological and chemical explosions but excludes other acts of war.

With regards to worksite direct insurance products, the Company retains all of the risk on its supplemental health product lines, including accidental death risk embedded within certain products. However, the Company’s other accidental death and dismemberment risk issued through all other policies and riders are ceded 100%.

With regards to employer-sponsored products, the Company has retained approximately 72.6% of gross and assumed group disability and specialty health benefits in 2022. The Company has a block of individual life and annuity benefits that is effectively 100% ceded. The Company purchases quota share reinsurance and excess reinsurance in amounts deemed appropriate by its risk committee. The Company monitors its retention amounts by product line and has the ability to adjust retention as appropriate.