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Insurance Company Subsidiary Operations | 9 Months Ended
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Sep. 30, 2025
Reinsurance Disclosures [Abstract] |
Insurance Company Subsidiary Operations | NOTE 13 Insurance Company Subsidiary Operations The Company operates a write-your-own flood insurance carrier, Wright National Flood Insurance Company. WNFIC’s underwriting business consists of policies written pursuant to the NFIP, the program administered by FEMA to which premiums and underwriting exposure are ceded, and excess flood policies, which are fully reinsured in the private market. Congressional authorization for the NFIP is periodically evaluated and may be subject to potential government shutdowns. The Company sells excess flood policies, which are 100% ceded to a highly rated reinsurance carrier. The Company operates and/or participates in various ancillary insurance operations, including (1) reinsurance companies and stand-alone captives that assume underwriting risk; (2) series captive insurance companies (SCICs); (3) protected cell companies; (4) segregated account companies; (5) a quota share captive and (6) an excess of loss layer captive. These respective entities are utilized for the purpose of managing SCICs, facilitating additional underwriting capacity, generating incremental revenues and/or participating in underwriting results. The Company acquired the SCICs through our acquisition of Accession. We consolidated the SCICs after determining they qualify as Variable Interest Entities (VIEs), and the Company is the primary beneficiary. The SCICs are required to follow the regulatory requirements of their respective domiciliary governments; and, the Company has no other restrictions over the use of the assets or liabilities of the SCICs. The Company purchases reinsurance from other insurance companies to limit total exposure. In addition, the Company cedes insurance risk to other insurance companies and the U.S. government as permitted by the NFIP. The Company’s SCICs are created for clients to insure their risks and manage the costs of their insurance programs. In these arrangements, the Company acts as a fronting insurer and enters into reinsurance treaties, under which the Company has ceded all of the liabilities to client-owned captive cells through cross collateralization between the cells. The premiums and underwriting exposure related to the Company’s SCIC insurance operations are fully ceded to the client-owned captive cells such that the Company’s SCIC operations have no underwriting risk on a net written basis. The quota share captive participates in risk sharing on policies placed by certain of our MGU businesses that currently underwrite property insurance for earthquake and wind exposed properties. A portion of written premiums are ceded to reinsurance companies, limiting, but not fully eliminating the Company's exposure to underwriting losses. The excess of loss layer captive participates in risk sharing on policies placed by one of our MGU businesses that underwrites risks associated with personal property, excluding flood, primarily in the southeastern United States with one layer of per risk excess reinsurance and three layers of catastrophe per occurrence reinsurance. All four layers have limited reinstatements; and therefore, the layers have capped, maximum aggregate limits. The effects of reinsurance on premiums written and earned are as follows:
|  | Nine months ended September 30, 2025 |
(in millions) |  | Written |  |  | Earned |
WNFIC: |  |  |  |  |  |
Direct |  | $ | 838 |  |  | $ | 773 |
Ceded |  |  | (838 | ) |  |  | (773 | )
Net premiums - WNFIC |  |  | — |  |  |  | — |
Captives: |  |  |  |  |  |
Direct |  |  | 159 |  |  |  | 326 |
Assumed |  |  | 133 |  |  |  | 106 |
Ceded |  |  | (217 | ) |  |  | (375 | )
Net premiums - Captives |  |  | 75 |  |  |  | 57 |
Net premiums - Total |  | $ | 75 |  |  | $ | 57 |
WNFIC All premiums written by the Company under NFIP are 100% ceded to FEMA, for which WNFIC received a 29.1% gross expense allowance from January 1, 2025 through September 30, 2025. For the same period, the Company ceded $835 million of written premiums to FEMA for NFIP policies and $3 million to highly rated carriers for excess flood policies. As of September 30, 2025, the Condensed Consolidated Balance Sheets contained reinsurance recoverable of $247 million and prepaid reinsurance premiums of $584 million, which are related to the WNFIC business. For flood policies, there was no change in the balance in the reserve for losses and loss adjustment expense net of reinsurance recoverable during the period January 1, 2025 through September 30, 2025, as the Company's direct premiums written were 100% ceded to two reinsurers. The gross balance of the reserve for losses and loss adjustment expense for the WNFIC, excluding related reinsurance recoverable, as of September 30, 2025 was $247 million. These balances primarily relate to hurricane claims activity in 2024. WNFIC maintains capital in excess of the minimum statutory amount of $8 million as required by regulatory authorities. The statutory capital and surplus of WNFIC was $37 million at September 30, 2025 and $44 million as of December 31, 2024. For the period from January 1, 2025 through September 30, 2025, WNFIC generated minimal statutory net loss. For the period from January 1, 2024 through December 31, 2024, WNFIC generated statutory net income of $9 million. The maximum amount of ordinary dividends that WNFIC can pay during a rolling twelve-month period is limited to the greater of 10% of statutory adjusted capital and surplus or 100% of adjusted net income. On June 27, 2025, WNFIC paid an ordinary dividend of $9 million. The dividend was declared and approved by the WNFIC Board of Directors on May 30, 2025. The maximum dividend payout that may be made in 2025 without prior approval is $9 million. Captives In December 2021, the initial funding to capitalize the quota share captive was $6 million. This capital in addition to earnings of $26 million through September 30, 2025 is considered at risk for loss. The excess of loss layer captive was renewed in June 2025 with underlying reinsurance treaties effective from June 1, 2025 through May 31, 2026. This captive’s maximum aggregate annual underwriting exposure is $2 million per occurrence, up to $4 million. As of September 30, 2025, the Condensed Consolidated Balance Sheet contained the following balances related to the Captives: deferred acquisition costs of $17 million, prepaid reinsurance premiums of $206 million, reinsurance recoverable of $356 million, reinsurance payable of $215 million, the reserve for losses and loss adjustment expense, excluding related reinsurance recoverable, of $373 million and unearned premiums of $303.

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