Reinsurance

3 Months Ended

Mar. 31, 2014

Reinsurance [Abstract]

Reinsurance

(4) Reinsurance

In the normal course of business, our insurance companies cede a portion of their premium to reinsurers through treaty and facultative reinsurance agreements. Although reinsurance does not discharge the direct insurer from liability to its policyholder, our insurance companies participate in such agreements in order to limit their loss exposure, protect them against catastrophic losses and diversify their business. The following tables present the effect of such reinsurance transactions on our premium, loss and loss adjustment expense and policy acquisition costs.

		Three months ended March 31,
		2014		2013
Direct written premium		$	620,512	$	581,571
Reinsurance assumed			126,210		138,634
Reinsurance ceded			(156,540)		(141,021)
	Net written premium	$	590,182	$	579,184
Direct earned premium		$	637,313	$	616,405
Reinsurance assumed			76,023		85,272
Reinsurance ceded			(150,724)		(140,491)
	Net earned premium	$	562,612	$	561,186
Direct loss and loss adjustment expense		$	350,727	$	357,512
Reinsurance assumed			41,802		39,691
Reinsurance ceded			(70,685)		(64,506)
	Net loss and loss adjustment expense	$	321,844	$	332,697

Policy acquisition costs		$	104,645	$	100,286
Ceding commissions			(35,604)		(33,337)
	Net policy acquisition costs	$	69,041	$	66,949

The table below shows the components of our reinsurance recoverables in our consolidated balance sheets.

		March 31,		December 31,
		2014		2013
Reinsurance recoverable on paid losses		$	124,368	$	156,026
Reinsurance recoverable on outstanding losses			459,900		459,134
Reinsurance recoverable on incurred but not reported losses			638,676		663,597
Reserve for uncollectible reinsurance			(1,500)		(1,500)
	Total reinsurance recoverables	$	1,221,444	$	1,277,257

Reinsurers not authorized by the respective states of domicile of our U.S. domiciled insurance companies are required to collateralize reinsurance obligations due to us. The table below shows letters of credit and cash that are available to us as collateral, as well as amountswe owe reinsurers that can be offset against amounts due to us.

		March 31,		December 31,
		2014		2013
Payables to reinsurers		$	204,741	$	208,850
Letters of credit			99,078		100,529
Funds held in trust			93,920		88,310
	Total credits	$	397,739	$	397,689