Allowance for Expected Credit Losses

12 Months Ended

Dec. 31, 2021

Premiums Receivable

The following table provides a roll forward of the allowance for expected credit losses of the Company’s premium receivables:


Year Ended December 31, 2021	Premium Receivables, Net of Allowance		Allowance for Expected Credit Losses









Balance at beginning of period	$	2,064,586	$	37,781

Change for provision of expected credit losses (2)			2,177

Balance at end of period	$	2,633,280	$	39,958

Year Ended December 31, 2020
Balance at beginning of period	$	1,778,717	$	21,003
Cumulative effect of accounting change (1)			6,539
Change for provision of expected credit losses (2)			10,239

Balance at end of period	$	2,064,586	$	37,781

(1) Adoption of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)”.

(2) Amounts deemed uncollectible are written-off in operating expenses. For the 2021 and 2020 periods, amounts written off totaled $3.8 million and $2.8 million, respectively.

Reinsurance Recoverables

The Company monitors the financial condition of its reinsurers and attempts to place coverages only with substantial, financially sound carriers. Although the Company has not experienced any material credit losses to date, an inability of its reinsurers or retrocessionaires to meet their obligations to it over the relevant exposure periods for any reason could have a material adverse effect on its financial condition and results of operations.

The following table provides a roll forward of the allowance for expected credit losses of the Company’s reinsurance recoverables:


Year Ended December 31, 2021	Reinsurance Recoverables, Net of Allowance		Allowance for Expected Credit Losses









Balance at beginning of period	$	4,500,802	$	11,636

Change for provision of expected credit losses			1,594


Balance at end of period	$	5,880,735	$	13,230

Year Ended December 31, 2020
Balance at beginning of period	$	4,346,816	$	1,364
Cumulative effect of accounting change (1)			12,010
Change for provision of expected credit losses			(1,738)
Balance at end of period	4,500,802		$	11,636

(1) Adoption of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)”.

The following table summarizes the Company’s reinsurance recoverables on paid and unpaid losses (not including ceded unearned premiums) at December 31, 2021 and 2020:


	December 31,
	2021			2020
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	$	5,880,735		$	4,500,802
% due from carriers with A.M. Best rating of “A-” or better	69.7		%	63.9		%
% due from all other rated carriers	0.1		%	0.1		%
% due from all other carriers with no A.M. Best rating (1)	30.2		%	36.0		%
Largest balance due from any one carrier as % of total shareholders’ equity (2)	6.7		%	1.8		%

(1) At December 31, 2021 and 2020 period, over 91% and 94% of such amount is collateralized through reinsurance trusts, funds withheld arrangements, letters of credit or other, respectively.

(2) The 2021 period included impact of deconsolidation of Somers. See note 12.

Contractholder Receivables

The following table provides a roll forward of the allowance for expected credit losses of the Company’s contractholder receivables:


Year Ended December 31, 2021	Contractholder Receivables, Net of Allowance		Allowance for Expected Credit Losses









Balance at beginning of period	$	1,986,924	$	8,638

Change for provision of expected credit losses			(5,201)


Balance at end of period	$	1,828,691	$	3,437

Year Ended December 31, 2020
Balance at beginning of period	$	2,119,460	$	—
Cumulative effect of accounting change (1)			6,663
Change for provision of expected credit losses			1,975
Balance at end of period	1,986,924		$	8,638

(1) Adoption of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)”.