The Company cedes insurance risk to reinsurers to enable the Company to manage capital and risk exposure. Such arrangements do not relieve the Company of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company's procedures include carefully selecting its reinsurers, structuring agreements to provide collateral funds where necessary, and regularly monitoring the financial condition and ratings of its reinsurers.

The Company has two adverse development cover (“ADC”) reinsurance agreements in place, both of which are accounted for as retroactive reinsurance. One agreement covers substantially all asbestos and environmental ("A&E") reserve development for 2016 and prior accident years ("A&E ADC") up to an aggregate limit of $1.5 billion and the other covered substantially all reserve development of Navigators Insurance Company and certain of its affiliates for 2018 and prior accident years (the Navigators ADC) up to an aggregate limit of $300. As the Company has ceded all of the $300 available limit, there is no remaining limit available as of December 31, 2022 under the Navigators ADC. For more information on ADC agreements, see Note 1 - Basis of Presentation and Significant Accounting Policies, and Note 11 - Reserve for Unpaid Losses and Loss Adjustment Expenses.

Property and Casualty ceded losses, which reduce losses and loss adjustment expenses incurred, were $1,338, $1,243 and

$1,156 for the years ended December 31, 2022, 2021 and 2020, respectively.

Group Benefits ceded losses, which reduce losses and loss adjustment expenses incurred, were $81, $85 and $63 for the years ended December 31, 2022, 2021 and 2020, respectively.

Reinsurance Recoverables

Reinsurance recoverables include balances due from reinsurance companies and are presented net of an allowance for uncollectible reinsurance. Reinsurance recoverables include an estimate of the amount of gross losses and loss adjustment expense reserves that may be ceded under the terms of the reinsurance agreements, including incurred but not reported unpaid losses. The Company’s estimate of losses and loss adjustment expense reserves ceded to reinsurers is based on assumptions that are consistent with those used in establishing the gross reserves for amounts the Company owes to its claimants. The Company estimates its ceded reinsurance recoverables based on the terms of any applicable facultative and treaty reinsurance, including an estimate of how incurred but not reported losses will ultimately be ceded under reinsurance agreements. Accordingly, the Company’s estimate of reinsurance recoverables is subject to similar risks and uncertainties as the estimate of the gross reserve for unpaid losses and loss adjustment expenses.


Reinsurance Recoverables by Credit Quality Indicator
	As of December 31, 2022								As of December 31, 2021
	Property and Casualty		Group Benefits		Corporate		Total		Property and Casualty		Group Benefits		Corporate		Total
AM Best Financial Strength Rating
A++	$	2,094	$	—	$	—	$	2,094	$	1,860	$	—	$	—	$	1,860
A+	2,169		239		261		2,669		1,999		237		275		2,511
A	763		1		—		764		713		—		—		713
A-	79		6		—		85		37		9		—		46
B++	616		—		2		618		639		—		3		642
Below B++	20		—		—		20		20		—		—		20
Total Rated by AM Best	5,741		246		263		6,250		5,268		246		278		5,792
Mandatory (Assigned) and Voluntary Risk Pools	218		—		—		218		239		—		—		239
Captives	319		—		—		319		331		—		—		331
Other not rated companies	279		5		—		284		255		5		—		260
Gross Reinsurance Recoverables	6,557		251		263		7,071		6,093		251		278		6,622
Allowance for uncollectible reinsurance	(102)		(1)		(2)		(105)		(96)		(1)		(2)		(99)
Net Reinsurance Recoverables	$	6,455	$	250	$	261	$	6,966	$	5,997	$	250	$	276	$	6,523

Balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods, generally 30, 60 or 90 days. To manage reinsurer credit risk, a reinsurance security review committee evaluates the credit standing, financial performance, management and operational quality of each potential reinsurer. In placing reinsurance, the Company considers the nature of the risk reinsured, including the expected liability payout duration, and establishes limits tiered by reinsurer credit rating.

Where its contracts permit, the Company secures future claim obligations with various forms of collateral or other credit enhancement, including irrevocable letters of credit, secured trusts, funds held accounts and group wide offsets. As part of its reinsurance recoverable review, the Company analyzes recent developments in commutation activity between reinsurers and cedants, recent trends in arbitration and litigation outcomes in disputes between cedants and reinsurers and the overall credit quality of the Company’s reinsurers.

Due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables become due, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or cash flows in a particular quarter or annual period.

The allowance for uncollectible reinsurance comprises an ACL and an allowance for disputed balances. The ACL is estimated as the amount of reinsurance recoverables exposed to loss multiplied by estimated factors for the probability of default and the amount of loss given a default. The probability of default is assigned based on each reinsurer's credit rating, or a rating is estimated if no external rating is available. Credit ratings are reviewed on a quarterly basis and any significant changes are reflected in an updated estimate. The probability of default factors are historical insurer and reinsurer defaults for liabilities

with similar durations to the reinsured liabilities as estimated through multiple economic cycles. Credit ratings are forward-looking and consider a variety of economic outcomes. The loss given default factors are based on a study of historical recovery rates for general creditors of corporations through multiple economic cycles or, in the case of purchased annuities funding structured settlements accounted for as reinsurance, historical recovery rates for annuity contract holders.

As shown in the table above, a portion of the total gross reinsurance recoverable balance relates to the Company’s participation in various mandatory (assigned) and voluntary risk pools. Reinsurance recoverables due from pools are backed by the financial position of all insurance companies participating in the pools and the credit backing the reinsurance recoverable is not limited to the financial strength of each pool. The mandatory pools generally are funded through policy assessments or surcharges and if any participant in the pool defaults, remaining liabilities are apportioned among the other members.

The Company's evaluation of the required ACL for reinsurance recoverables considers the current economic environment as well as macroeconomic scenarios similar to the approach used to estimate the ACL for mortgage loans. See Note 5 - Investments. Insurance companies, including reinsurers, are regulated and hold risk-based capital to mitigate the risk of loss due to economic factors and other risks. Non-U.S. reinsurers are either subject to a capital regime substantively equivalent to domestic insurers or we hold collateral to support collection of reinsurance recoverables. As a result, there is limited history of losses from insurer defaults. There were $0 and $1 in write-offs for the years ended December 31, 2022 and 2021, respectively, that would impact the ACL. The decrease in the ACL in 2021 was primarily due to a higher than expected recovery from one reinsurer on which the Company had recognized an ACL. In 2020, the increase in the ACL includes the increasing impacts of COVID-19.


Allowance for Uncollectible Reinsurance
	As of December 31, 2022								As of December 31, 2021								As of December 31, 2020
	Property and Casualty		Group Benefits		Corporate		Total		Property and Casualty		Group Benefits		Corporate		Total		Property and Casualty		Group Benefits		Corporate		Total
Beginning allowance for uncollectible reinsurance	$	96	$	1	$	2	$	99	$	105	$	1	$	2	$	108	$	114	$	—	$	—	$	114
Beginning allowance for disputed amounts	54		—		—		54		53		—		—		53		66		—		—		66
Beginning ACL	42		1		2		45		52		1		2		55		48		—		—		48
Cumulative effect of accounting change [1]																	—		1		1		2
Adjusted beginning ACL	42		1		2		45		52		1		2		55		48		1		1		50
Current period provision (release)	—		—		—		—		(9)		—		—		(9)		3		—		1		4
Current period gross write-offs	—		—		—		—		(1)		—		—		(1)		—		—		—		—
Current period gross recoveries	—		—		—		—		—		—		—		—		1		—		—		1
Ending ACL	42		1		2		45		42		1		2		45		52		1		2		55
Ending allowance for disputed amounts	60		—		—		60		54		—		—		54		53		—		—		53
Ending allowance for uncollectible reinsurance	$	102	$	1	$	2	$	105	$	96	$	1	$	2	$	99	$	105	$	1	$	2	$	108

[1]Represents the adjustment to the ACL recorded on adoption of accounting guidance for credit losses on January 1, 2020. For further information refer to Note 1 - Basis of Presentation and Significant Accounting Policies.

Insurance Revenues

Property and Casualty Insurance Revenue


	For the years ended December 31,
Premiums Written	2022		2021		2020
Direct	$	14,891	$	13,696	$	12,537
Assumed	718		631		577
Ceded	(1,490)		(1,378)		(1,209)
Net	$	14,119	$	12,949	$	11,905
Premiums Earned
Direct	$	14,328	$	13,204	$	12,551
Assumed	654		568		540
Ceded	(1,462)		(1,277)		(1,173)
Net	$	13,520	$	12,495	$	11,918

Group Benefits Revenue


	For the years ended December 31,
	2022		2021		2020
Gross earned premiums, fees and other considerations	$	5,988	$	5,663	$	5,245
Reinsurance assumed	175		128		387
Reinsurance ceded	(106)		(104)		(96)
Net earned premiums, fees and other considerations	$	6,057	$	5,687	$	5,536

For its group benefits products, the Company reinsures certain of its risks to other reinsurers under yearly renewable term and coinsurance arrangements and variations thereto. Yearly renewable term and coinsurance arrangements result in passing a portion of the risk to the reinsurer. Generally, the reinsurer receives a proportionate amount of the premiums less an allowance for commissions and expenses and is liable for a corresponding proportionate amount of all benefit payments.