Financial Guarantee Insurance Contracts

12 Months Ended

Dec. 31, 2024

Reinsurance Recoverables, Including Credit Impairments:

Everspan’s reinsurance assets, including deferred ceded premiums and reinsurance recoverables on losses amounted to $454,491 at December 31, 2024. Credit exposure existed at December 31, 2024, with respect to reinsurance recoverables to the extent that any reinsurer may not be able to reimburse Everspan under the terms of these reinsurance arrangements. At December 31, 2024, there were ceded reinsurance balances payable of $53,002 offsetting this credit exposure. Contractually ceded reinsurance payables can only be offset against amounts owed from the same reinsurer in the event that such reinsurer is unable to meet its obligations to reimburse Everspan.

To minimize its credit exposure to losses from reinsurer insolvencies, Everspan (i) is entitled to receive collateral from its reinsurance counterparties in certain reinsurance contracts

and (ii) has certain cancellation rights that can be exercised by Everspan in the event of rating agency downgrades of a reinsurer (among other events and circumstances). Everspan held letters of credit and collateral amounting to $62,792 from its reinsurers at December 31, 2024. For those reinsurance counterparties that do not currently post collateral, Everspan's reinsurers are well capitalized, highly rated, authorized capacity providers. Additionally, while legacy liabilities from the Providence Washington Insurance Company acquisition and the admitted carriers acquired by Everspan on January 3, 2022 (Greenwood Insurance Company, and Consolidated Specialty Insurance Company), were fully ceded to certain reinsurers, Everspan also benefits from an unlimited, uncapped indemnity from Enstar Holdings (US) and 21st Century Premier Insurance Company, respectively, to mitigate any residual risk to these reinsurers.

For 2024, our top five reinsurers represented 69% our total reinsurance recoverables on paid and unpaid losses. These reinsurance recoverables were primarily from reinsurers with applicable ratings of A or better. The following table sets forth our five most significant reinsurers by amount of reinsurance recoverable as of December 31, 2024.


Reinsurers	Type of Insurance	Rating (1)	Reinsurance Recoverable (2)		Unsecured Recoverable (3)
General Reinsurance Company	Specialty P&C	A++	$	135,706	$	117,537
QBE Insurance Corporation	Specialty P&C	A	31,502		31,502
Munich Reinsurance Company	Specialty P&C	A+	20,052		16,653
The Cincinnati Insurance Company	Specialty P&C	A+	15,663		14,933
Everest Reinsurance Company	Specialty P&C	A+	8,641		7,356
All other reinsurers			94,726		44,329
Total recoverables			$	306,290	$	232,310

(1)Represents financial strength ratings from AM Best.

(2)Represents reinsurance recoverables on paid and unpaid losses. Unsecured amounts from QBE Insurance Corporation is also supported by an unlimited, uncapped indemnity from Enstar Holdings (US).

(3)Reinsurance recoverables reduced by ceded premiums payables due to reinsurers, letters of credit, and collateral posted for the benefit of Everspan.

Everspan has uncollateralized credit exposure to reinsurers of $232,310 and $127,568 and has recorded an allowance for credit losses of $100 and $100 at December 31, 2024 and 2023, respectively. The uncollateralized credit exposure to reinsurers includes legacy liabilities obtained from the acquisitions of Providence Washington Insurance Company and the admitted carriers acquired by Everspan on January 3, 2022, of $35,146 and $43,688 at December 31, 2024 and December 31, 2023, respectively. All legacy liabilities remain with affiliates of the sellers through reinsurance and contractual indemnities.

Liability for Future Policy Benefits and Unpaid Claims Disclosure

The following is a summary of loss and loss adjustment expense reserves, including certain components, for the Company’s major product lines by reporting segment at December 31, 2024.


	Net Loss and Loss Adjustment Expense Reserves		Reinsurance Recoverables on Unpaid Losses (1)		Loss and Loss Adjustment Reserves (1)
Commercial auto	$	28,720	$	129,752	$	158,472
Excess and general liability	14,857		70,602		85,459
Workers compensation	14,465		—		14,465
Non-standard personal auto	12,185		504		12,689
Unallocated loss adjustment expense reserves	6,578		5,660		12,238
Other	2,176		63,563		65,739
Total	78,981		270,081		349,062

(1)Other includes $35,146 related to legacy liabilities obtained from the acquisitions of Providence Washington Insurance Company, Greenwood Insurance Company, and Consolidated Specialty Insurance Company. All legacy liabilities remain obligations of affiliates of the sellers through reinsurance and contractual indemnities.