REINSURANCE

12 Months Ended

Dec. 31, 2024

The Company utilizes reinsurance agreements to reduce its exposure to large claims and catastrophic loss occurrences. These agreements provide for recovery from reinsurers of a portion of losses and LAE under certain circumstances without relieving the Company of its underlying obligations to the policyholders. Losses and LAE incurred and premiums earned are reported after deduction for reinsurance. In the event that one or more of the reinsurers were unable to meet their obligations under these reinsurance agreements, the Company would not realize the full value of the reinsurance recoverable balances. 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. 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 LAE reserves that may be ceded under the terms of the reinsurance agreements, including IBNR unpaid losses. The Company’s estimate of losses and LAE 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 receivable based on the terms of any applicable facultative and treaty reinsurance, including an estimate of how IBNR 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 LAE. The Company may hold partial collateral, including letters of credit and funds held, under these agreements. See also Note 1C, Note 4 and Note 10 of the Notes to these Consolidated Financial Statements.

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.

See Note 1C of the Notes to these Consolidated Financial Statements for discussion of allowance on reinsurance recoverables.

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 receivable. As a result, there is limited history of losses from insurer defaults.

Premiums written and earned and incurred losses and LAE are comprised of the following for the periods indicated:


	Years Ended December 31,
(Dollars in millions)	2024		2023		2022
Written premiums:
Direct	$	5,115	$	5,031	$	4,602
Assumed	13,117		11,606		9,350
Ceded	(2,418)		(1,907)		(1,608)
Net written premiums	$	15,814	$	14,730	$	12,344

Premiums earned:
Direct	$	4,977	$	4,733	$	4,218
Assumed	12,458		10,518		9,082
Ceded	(2,248)		(1,807)		(1,513)
Net premiums earned	$	15,187	$	13,443	$	11,787

Incurred losses and LAE:
Direct	$	5,465	$	3,209	$	2,804
Assumed	7,464		5,870		6,285
Ceded	(1,624)		(651)		(988)
Net incurred losses and LAE	$	11,305	$	8,427	$	8,100