Reinsurance (Tables)

3 Months Ended

Mar. 31, 2022

The effect of all of our reinsurance agreements on premiums earned and losses incurred is shown in table 4.1 below.


Reinsurance
Table	4.1
		Three Months Ended March 31,
(In thousands)		2022		2021
Premiums earned:
Direct		$	287,273	$	296,271
Assumed		2,126		2,411
Ceded (1)		(34,159)		(43,637)
Net premiums earned		$	255,240	$	255,045

Losses incurred:
Direct		$	(21,092)	$	48,071
Assumed		(207)		(25)
Ceded		1,985		(8,410)
Losses incurred, net		$	(19,314)	$	39,636

(1)Ceded premiums earned net of profit commission.

Schedule Of Quota Share Reinsurance Agreements

Table 4.2 below provides additional detail regarding our QSR Transactions.


Quota Share Reinsurance
Table	4.2

Quota Share Contract		Covered Policy Years	Quota Share %		Annual Loss Ratio to Exhaust Profit Commission (1)		Contractual Termination Date
2015 QSR		Prior to 2017	15.0	%	68.0	%	December 31, 2031
2019 QSR		2019	30.0	%	62.0	%	December 31, 2030
2020 QSR		2020	12.5	%	62.0	%	December 31, 2031
2020 QSR and 2021 QSR		2020	17.5	%	62.0	%	December 31, 2032
2020 QSR and 2021 QSR		2021	17.5	%	61.9	%	December 31, 2032
2021 QSR and 2022 QSR		2021	12.5	%	57.5	%	December 31, 2032
2021 QSR and 2022 QSR		2022	15.0	%	57.5	%	December 31, 2033
2022 QSR and 2023 QSR		2022	15.0	%	62.0	%	December 31, 2033
2022 QSR and 2023 QSR		2023	15.0	%	62.0	%	December 31, 2034
Credit Union QSR (2)		2020-2025	65.0	%	50.0	%	December 31, 2039

(1) We will receive a profit commission provided the annual loss ratio on policies covered under the transaction remains below this ratio.

(2) Eligible credit union business written before April 1, 2020 was covered by our 2019 and prior QSR Transactions.

Table 4.3 provides additional detail regarding optional termination dates and optional reductions to our quota share percentage which can, in each case, be elected by us for a fee. Under the optional reduction to the quota share percentage, we may reduce our quota share percentage from the original percentage shown in table 4.2 to the percentage shown in table 4.3.

Quota Share Reinsurance

Table

4.3

Quota Share Contract

Optional Termination Date (1)

Optional Quota Share % Reduction Date (2)

Optional Reduced Quota Share %

2015 QSR

June 30, 2021

2019 QSR

July 1, 2022

25% or 20%

2020 QSR

December 31, 2022

July 1, 2022

10.5% or 8%

2020 QSR and 2021 QSR, 2020 Policy year

December 31, 2022

July 1, 2022

14.5% or 12%

2020 QSR and 2021 QSR, 2021 Policy year

December 31, 2023

July 1, 2022

14.5% or 12%

2021 QSR and 2022 QSR. 2021 Policy Year

December 31, 2023

July 1, 2022

10.5% or 8%

2021 QSR and 2022 QSR, 2022 Policy Year

December 31, 2024

July 1, 2023

12.5% or 10%

2022 QSR and 2023 QSR, 2022 Policy Year

December 31, 2024

July 1, 2023

12.5% or 10%

2022 QSR and 2023 QSR, 2023 Policy Year

December 31, 2025

July 1, 2024

12.5% or 10%

(1) We can elect early termination of the QSR Transaction beginning on this date, and bi-annually thereafter.

(2) We can elect to reduce the quota share percentage beginning on this date, and bi-annually thereafter.

Effect of quota share reinsurance agreements on premiums earned and losses incurred

Table 4.4 below provides a summary of our QSR Transactions, for the three months ended March 31, 2022 and 2021.


Quota Share Reinsurance
Table	4.4
		Three Months Ended March 31,
(In thousands)		2022		2021
Ceded premiums written and earned, net of profit commission		$	22,378	$	33,390
Ceded losses incurred		(1,985)		8,405
Ceding commissions (1)		12,272		13,067
Profit commission		38,980		31,944

(1) Ceding commissions are reported within Other underwriting and operating expenses, net on the consolidated statements of operations.

Schedule of coverages and retention

Table 4.5 provides a summary of our Home Re Transactions as of March 31, 2022 and December 31, 2021.


Excess of Loss Reinsurance
Table 4.5
($ in thousands)	Home Re 2021-2, Ltd.	Home Re 2021-1, Ltd.	Home Re 2020-1, Ltd.	Home Re 2019-1, Ltd.	Home Re 2018-1, Ltd.
Issue Date	August 3, 2021	February 2, 2021	October 29, 2020	May 25, 2019	October 30, 2018
Policy Inforce Dates	January 1, 2021 - May 28, 2021	August 1, 2020 - December 31, 2020	January 1, 2020 - July 31, 2020	January 1, 2018 - March 31, 2019	July 1, 2016 - December 31, 2017
Optional Call Date (1)	July 25, 2028	January 25, 2028	October 25, 2027	May 25, 2026	October 25, 2025
Legal Maturity	12.5 years	12.5 years	10 years	10 years	10 years
Initial First Layer Retention	190,159	211,159	275,283	185,730	168,691
Initial Excess of Loss Reinsurance Coverage	398,429	398,848	412,917	315,739	318,636
March 31, 2022
Remaining First Layer Retention	190,159	211,142	275,172	183,807	165,179
Remaining Excess of Loss Reinsurance Coverage	398,429	361,362	196,552	208,146	218,343
December 31, 2021
Remaining First Layer Retention	190,159	211,142	275,204	183,917	165,365
Remaining Excess of Loss Reinsurance Coverage	398,429	387,830	234,312	208,146	218,343

(1) We have the right to terminate the Home Re Transactions under certain circumstances and on any payment date on or after the respective Optional Call Date.

Schedule of total assets of Home Re

Table 4.6 presents the total assets of the Home Re Entities as of March 31, 2022 and December 31, 2021.


Home Re total assets
Table	4.6
(In thousands)
Home Re Entity		Total VIE Assets
March 31, 2022
Home Re 2018-1 Ltd.		$	218,343
Home Re 2019-1 Ltd.		208,146
Home Re 2020-1 Ltd.		209,686
Home Re 2021-1 Ltd.		370,621
Home Re 2021-2 Ltd.		398,429

December 31, 2021
Home Re 2018-1 Ltd.		$	218,343
Home Re 2019-1 Ltd.		208,146
Home Re 2020-1 Ltd.		251,387
Home Re 2021-1 Ltd.		398,848
Home Re 2021-2 Ltd.		398,429

- Definition

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