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Reinsurance (Tables)

12 Months Ended

Dec. 31, 2024

Effect of Reinsurance Agreements on Premiums Earned and Losses Incurred

Table 9.1 below shows the effect of all reinsurance agreements on premiums earned and losses incurred as reflected in the consolidated statements of operations.


Reinsurance
Table	9.1
		Years ended December 31,
(In thousands)		2024		2023		2022
Premiums earned:
Direct		$	1,138,245	$	1,142,412	$	1,154,728
Assumed		14,458		12,960		8,778
Ceded:
Ceded - quota share reinsurance (1)		(115,306)		(123,955)		(86,435)
Ceded - excess-of-loss reinsurance		(66,590)		(78,866)		(69,938)
Total ceded		(181,896)		(202,821)		(156,373)
Net premiums earned		$	970,807	$	952,551	$	1,007,133

Losses incurred:
Direct		$	5,714	$	(5,200)	$	(274,072)
Assumed		32		(33)		(330)
Ceded - quota share reinsurance		(20,607)		(15,623)		19,837
Losses incurred, net		$	(14,861)	$	(20,856)	$	(254,565)

Other Reinsurance Impacts:
Profit commission on quota share reinsurance (1)		$	108,368	$	133,145	$	176,084
Ceding commission on quota share reinsurance		44,532		50,397		52,071

(1)Ceded premiums earned are shown net of profit commission.

Schedule of Quota Share Reinsurance Agreements

Table 9.2 below provides additional detail regarding our QSR transactions in effect during 2024.


Reinsurance
Table	9.2

Quota Share Contract			Covered Policy Years	Quota Share %		Annual Loss Ratio to Exhaust Profit Commission (1)		Contractual Termination Date
2020 QSR and 2021 QSR		(2)	2021	17.5	%	61.9	%	'December 31, 2036
2021 QSR and 2022 QSR		(3)	2021	12.5	%	57.5	%	'December 31, 2036
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
2023 QSR			2023	10.0	%	58.5	%	December 31, 2034
2024 QSR			2024	30.0	%	56.0	%	'December 31, 2035
Credit Union QSR			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)Effective December 31, 2024, we agreed to amended terms with certain participants on our 2020 QSR and 2021 QSR Transaction covering policy year 2021 reducing the quota share cede rate to 14.8%. Under the amended terms we will generally receive an annual profit commission provided the annual loss ratio on loans covered under the transaction remain below 69%.

(3)Effective December 31, 2024, we agreed to amended terms with certain participants on our 2021 QSR and 2022 QSR Transaction covering policy year 2021 reducing the quota share cede rate to 11.1%. Under the amended terms we will generally receive an annual profit commission provided the annual loss ratio on loans covered under the transaction remain below 69%.

Table 9.3 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 9.2 to the percentage shown in 9.3.

Reinsurance

Table 9.3

Quota Share Contract

Covered Policy Years

Optional Termination Date (1)

Optional Quota Share % Reduction Date (2)

Optional Reduced Quota Share %

2020 QSR and 2021 QSR (3)

2021

December 31, 2027

January 1, 2028

12.3% or 10%

2021 QSR and 2022 QSR (3)

2021

December 31, 2027

January 1, 2028

9.4% or 7%

2021 QSR and 2022 QSR

2022

July 1 , 2025

January 1, 2025

12.5% or 10%

2022 QSR and 2023 QSR

2022

July 1, 2025

January 1, 2025

12.5% or 10%

2022 QSR and 2023 QSR

2023

December 31, 2025

January 1, 2025

12.5% or 10%

2023 QSR

2023

December 31, 2025

January 1, 2025

8% or 7%

2024 QSR

2024

December 31, 2027

23% or 15%

(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.

(3) Terms of the agreement were amended effective December 31, 2024.

Reinsurance Retention Policy

Table 9.4a , 9.4b, and 9.4c provide a summary of our XOL Transactions as of December 31, 2024, December 31, 2023 and December 31, 2022.

Excess of Loss Reinsurance

9.4a

($ in thousands)

Issue Date

Policy In force Dates

Optional Call/ Termination Date (1)

Legal Maturity

2024 Traditional XOL

April 1, 2024

January 1, 2024 - December 31, 2024

January 1, 2030

10 years

2023 Traditional XOL

April 1, 2023

January 1, 2023 - December 29, 2023

January 1, 2031

10 years

2022 Traditional XOL

April 1, 2022

January 1, 2022 - December 30, 2022

January 1, 2030

10 years

Home Re 2023-1, Ltd.

October 23, 2023

June 1, 2022 - August 31, 2023

October 25, 2028

10 years

Home Re 2022-1, Ltd.

April 26, 2022

May 29, 2021 - December 31, 2021

April 25, 2028

12.5 years

Home Re 2021-2, Ltd.

August 3, 2021

January 1, 2021 - May 28, 2021

July 25, 2028

12.5 years

Home Re 2021-1, Ltd.

February 2, 2021

August 1, 2020 - December 31, 2020

January 25, 2028

12.5 years

(1)We have the right to terminate the Home Re Transactions under certain circumstances, including an optional call feature that provides us the right to terminate if the outstanding principal balance of the related insurance-linked notes falls below 10% of the initial principal balance of the related insurance-linked notes, and on any payment date on or after the respective Optional Call Date. We can elect early termination of the Traditional XOL Transactions beginning on this date, and quarterly thereafter.


Excess of Loss Reinsurance
9.4b			Remaining First Layer Retention
($ in thousands)	Initial First Layer Retention		December 31, 2024		December 31, 2023		December 31, 2022
2024 Traditional XOL	$	125,016	$	125,016	$	—	$	—
2023 Traditional XOL	70,578		70,401		70,578		—
2022 Traditional XOL	82,523		81,112		82,346		82,517
Home Re 2023-1, Ltd.	272,961		272,269		272,961		—
Home Re 2022-1, Ltd.	325,589		322,566		325,001		325,576
Home Re 2021-2, Ltd.	190,159		188,211		189,403		190,097
Home Re 2021-1, Ltd.	211,159		210,027		210,831		211,102


9.4c							Remaining Excess of Loss Reinsurance Coverage (1)
($ in thousands)	Initial Excess of Loss Reinsurance Coverage (1)		Initial Funding Percentage (2)		Funding Percentage at 12/31/2024 (2)		December 31, 2024		December 31, 2023		December 31, 2022
2024 Traditional XOL	$	187,220	N/A		N/A		$	187,220	$	—	$	—
2023 Traditional XOL	96,942		N/A		N/A		91,404		96,942		—
2022 Traditional XOL	142,642		N/A		N/A		124,344		142,642		142,642
Home Re 2023-1, Ltd.	330,277		97	%	97	%	299,325		330,277		—
Home Re 2022-1, Ltd.	473,575		100	%	100	%	305,639		420,731		473,575
Home Re 2021-2, Ltd. (3)	398,429		100	%	85	%	132,424		173,960		352,084
Home Re 2021-1, Ltd.	398,848		100	%	100	%	92,019		117,982		277,053

(1)The initial and remaining excess of loss reinsurance coverage is reduced by the applicable funding percentage.

(2)The funding percentage represents the aggregate outstanding note balances divided by the aggregate ending coverage amounts.

(3)The funding percentage on the 2021-2 was reduced from 100% after a tender offer was conducted in the fourth quarter of 2023.

Schedule of Total Assets of Home Re Entities

Table 9.5 presents the total assets of the Home Re Entities as of December 31, 2024 , December 31, 2023 and December 31, 2022.


Home Re Entities total assets
Table	9.5

(In thousands)
Home Re Entity		Total VIE Assets
		December 31, 2024		December 31, 2023		December 31, 2022
Home Re 2023-1 Ltd.		$	303,733	$	330,277	$	—
Home Re 2022-1 Ltd.		313,229		427,279		473,575
Home Re 2021-2 Ltd.		136,486		174,431		357,340
Home Re 2021-1 Ltd.		97,373		118,043		285,039

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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