XML 42 R13.htm IDEA: XBRL DOCUMENT v3.19.3
Reinsurance
 9 Months Ended
Sep. 30, 2019
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract]  
Reinsurance REINSURANCE
The Company purchases reinsurance and other protection to manage its risk portfolio and to reduce its exposure to large losses. The Company currently has in place contracts that provide for recovery of a portion of certain claims and claim expenses, generally in excess of various retentions or on a proportional basis. In addition to loss recoveries, certain of the Company’s ceded reinsurance contracts provide for payments of additional premiums, for reinstatement premiums and for lost no-claims bonuses, which are incurred when losses are ceded to the respective reinsurance contracts. The Company remains liable to the extent that any reinsurer fails to meet its obligations.
The following table sets forth the effect of reinsurance and retrocessional activity on premiums written and earned and on net claims and claim expenses incurred:
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
Nine months ended
 
 
 
September 30,
2019
 
September 30,
2018
 
September 30,
2019
 
September 30,
2018
 
 
Premiums written
 
 
 
 
 
 
 
 
 
Direct
$
108,478

 
$
74,635

 
$
318,984

 
$
250,375

 
 
Assumed
752,590

 
551,042

 
3,583,287

 
2,512,297

 
 
Ceded
(156,938
)
 
(172,422
)
 
(1,246,145
)
 
(1,041,864
)
 
 
Net premiums written
$
704,130

 
$
453,255

 
$
2,656,126

 
$
1,720,808

 
 
Premiums earned
 
 
 
 
 
 
 
 
 
Direct
$
103,446

 
$
73,356

 
$
283,898

 
$
213,292

 
 
Assumed
1,146,831

 
760,920

 
3,114,408

 
1,968,138

 
 
Ceded
(343,529
)
 
(302,427
)
 
(1,030,028
)
 
(779,914
)
 
 
Net premiums earned
$
906,748

 
$
531,849

 
$
2,368,278

 
$
1,401,516

 
 
Claims and claim expenses
 
 
 
 
 
 
 
 
 
Gross claims and claim expenses incurred
$
714,714

 
$
514,873

 
$
1,804,889

 
$
817,560

 
 
Claims and claim expenses recovered
(60,194
)
 
(104,363
)
 
(469,961
)
 
(175,180
)
 
 
Net claims and claim expenses incurred
$
654,520

 
$
410,510

 
$
1,334,928

 
$
642,380

 
 
 
 
 
 
 
 
 
 
 

At September 30, 2019, the Company’s reinsurance recoverable balance was $2.4 billion (December 31, 2018 - $2.4 billion). Of the Company’s reinsurance recoverable balance at September 30, 2019, 59.5% is fully collateralized by our reinsurers, 38.9% is recoverable from reinsurers rated A- or higher by major rating agencies and 1.6% is recoverable from reinsurers rated lower than A- by major rating agencies (December 31, 2018 - 60.8%, 38.0% and 1.2%, respectively). The reinsurers with the three largest balances accounted for 14.6%, 8.2% and 8.0%, respectively, of the Company’s reinsurance recoverable balance at September 30, 2019 (December 31, 2018 - 15.5%, 6.7% and 6.5%, respectively). The valuation
allowance recorded against reinsurance recoverable was $7.1 million at September 30, 2019 (December 31, 2018 - $9.0 million). The three largest company-specific components of the valuation allowance represented 17.4%, 7.4% and 7.0%, respectively, of the Company’s total valuation allowance at September 30, 2019 (December 31, 2018 - 16.2%, 14.8% and 12.3%, respectively).