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Reinsurance (Tables)

3 Months Ended

Mar. 31, 2025

The effect of all of our reinsurance transactions on our consolidated statement of operations is shown in table 4.1 below.


Reinsurance
Table	4.1
		Three Months Ended March 31,
(In thousands)		2025		2024
Premiums earned:
Direct		$	284,821	$	284,021
Assumed		3,561		3,442
Ceded:
Ceded - quota share reinsurance (1)		(29,943)		(28,715)
Ceded - excess-of-loss reinsurance		(14,720)		(16,104)
Total ceded		(44,663)		(44,819)
Net premiums earned		$	243,719	$	242,644

Losses incurred:
Direct		$	16,017	$	10,979
Assumed		5		29
Ceded - quota share reinsurance		(6,431)		(6,453)
Losses incurred, net		$	9,591	$	4,555

Other Reinsurance Impacts:
Profit commission on quota share reinsurance (1)		$	28,695	$	24,584
Ceding commission on quota share reinsurance		11,727		10,660

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

Schedule of quota share reinsurance transactions

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
2020 QSR and 2021 QSR		2021	14.8	%	69.0	%	December 31, 2036
2021 QSR and 2022 QSR		2021	11.1	%	69.0	%	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
2025 QSR		2025	40.0	%	63.0	%	'December 31, 2036
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.

Table 4.3 provides additional details 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

Covered Policy Years

Optional Termination Date (1)

Optional Quota Share % Reduction Date (2)

Optional Reduced Quota Share %

2020 QSR and 2021 QSR

2021

December 31, 2027

January 1, 2028

12.3% or 10%

2021 QSR and 2022 QSR

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%

2025 QSR

2025

December 31, 2027

30% or 20%

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

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

Schedule of coverages and retention

Table 4.4a, 4.4b, and 4.4c provide a summary of our XOL Transactions as of March 31, 2025 and December 31, 2024.

Excess of Loss Reinsurance

Table 4.4a

Issue Date

Policy In force Dates

Optional Call 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

2020 Traditional XOL

March 1, 2025

January 1, 2020 - December 31, 2020

April 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
Table 4.4b			Remaining First Layer Retention
($ in thousands)	Initial First Layer Retention		March 31, 2025		December 31, 2024
2024 Traditional XOL	$	125,016	$	124,985	$	125,016
2023 Traditional XOL	70,578		70,218		70,401
2022 Traditional XOL	82,523		80,346		81,112
2020 Traditional XOL	68,343		68,343		—
Home Re 2023-1, Ltd.	272,961		271,268		272,269
Home Re 2022-1, Ltd.	325,589		321,918		322,566
Home Re 2021-2, Ltd.	190,159		187,889		188,211
Home Re 2021-1, Ltd.	211,159		209,913		210,027


Table 4.4c							Remaining Excess of Loss Reinsurance Coverage (1)
($ in thousands)	Initial Excess of Loss Reinsurance Coverage (1)		Initial Funding Percentage (2)		Funding Percentage at 3/31/2025 (2)		March 31, 2025		December 31, 2024
2024 Traditional XOL	$	187,220	N/A		N/A		$	187,220	$	187,220
2023 Traditional XOL	96,942		N/A		N/A		87,542		91,404
2022 Traditional XOL	142,642		N/A		N/A		118,729		124,344
2020 Traditional XOL	250,592		N/A		N/A		250,592		—
Home Re 2023-1, Ltd.	330,277		97	%	96	%	285,333		299,325
Home Re 2022-1, Ltd.	473,575		100	%	100	%	282,008		305,639
Home Re 2021-2, Ltd. (3)	398,429		100	%	88	%	120,163		132,424
Home Re 2021-1, Ltd.	398,848		100	%	100	%	75,906		92,019

(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 the tender offers were conducted in the fourth quarter of 2023.

Schedule of total assets of Home Re

Table 4.5 presents the total assets of the Home Re Entities as of March 31, 2025 and December 31, 2024.


Home Re total assets
Table	4.5
(In thousands)		Total VIE Assets
Home Re Entity		March 31, 2025		December 31, 2024

Home Re 2023-1 Ltd.		$	290,619	$	303,733
Home Re 2022-1 Ltd.		290,274		313,229
Home Re 2021-2 Ltd.		124,487		136,486
Home Re 2021-1 Ltd.		81,406		97,373

- 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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