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Reinsurance (Tables)

12 Months Ended

Dec. 31, 2022

Reinsurance Disclosures [Abstract]

Schedule of Effects of Reinsurance

The effect of reinsurance on net premiums written and earned is as follows: 

						Year Ended December 31,
(In thousands)						2022						2021						2020
Net premiums written:
Direct						$	927,702					$	918,406					$	922,851
Ceded (1)						(107,673)						(110,914)						(88,738)
Net premiums written						$	820,029					$	807,492					$	834,113
Net premiums earned:
Direct						$	950,200					$	983,457					$	951,302
Ceded (1)						(107,673)						(110,914)						(88,738)
Net premiums earned						$	842,527					$	872,543					$	862,564

_______________________________________________________________________________

(1)Net of profit commission.

The following tables summarizes Essent Guaranty's quota share reinsurance agreements as of December 31, 2022:

QSR Agreement						Coverage Period						Ceding Percentage						Ceding Commission						Profit Commission
QSR-2019						September 1, 2019-December 31, 2020						(1)						20%						63%			(2)
QSR-2022						January 1, 2022-December 31, 2022						20%						20%						62%

_______________________________________________________________________________

(1)Under QSR-2019, Essent Guaranty cedes 40% of premiums on singles policies and 20% on all other policies.

(2)The original profit commission on QSR-2019 was up to 60%; however because Essent Guaranty did not exercise its option to terminate the QSR Agreement on December 31, 2021, the maximum profit commission that Essent Guaranty could earn increased to 63% in 2022 and thereafter.

Schedule of Coverages and Retentions

The following tables summarizes Essent Guaranty's excess of loss reinsurance agreements as of December 31, 2022:

Vintage Year

Reinsurer

Effective Date

Optional Termination Date

2015 & 2016

Radnor Re 2019-2 Ltd.

June 20, 2019

June 25, 2024

2017

Radnor Re 2018-1 Ltd.

March 22, 2018

March 25, 2023

(1)

2017

Panel of Reinsurers

November 1, 2018

October 1, 2023

(2)

2018

Radnor Re 2019-1 Ltd.

February 28, 2019

February 25, 2026

2018

Panel of Reinsurers

February 28, 2019

February 25, 2026

2019

Radnor Re 2020-1 Ltd.

January 30, 2020

January 25, 2027

2019

Panel of Reinsurers

January 30, 2020

January 25, 2027

2020 & 2021

Radnor Re 2021-1 Ltd.

June 23, 2021

June 26, 2028

2021

Radnor Re 2021-2 Ltd.

November 10, 2021

November 25, 2027

2021 & 2022

Panel of Reinsurers

June 1, 2022

January 1, 2030

2021 & 2022

Radnor Re 2022-1 Ltd.

September 21, 2022

September 25, 2028

_______________________________________________________________________________

(1)If the reinsurance agreement is not terminated at the optional termination date, the risk margin component of the reinsurance premium increases by 50%.

(2)If the reinsurance agreement is not terminated at the optional termination date, the reinsurance premium increases by 50%.

The following table summarizes Essent Guaranty's excess of loss reinsurance coverages and retentions as of December 31, 2022:

(In thousands)																		Remaining Reinsurance in Force
Vintage Year						Remaining Insurance in Force						Remaining Risk in Force						ILN						Other Reinsurance									Total						Remaining First Layer Retention
2015 & 2016						$	5,931,479					$	1,610,997					$	41,764					$	—								$	41,764					$	206,843
2017						5,810,456						1,527,469						225,562						85,627			(7)						311,189						216,143
2018						6,620,816						1,708,129						325,537						76,144			(8)						401,681						248,675
2019 (3)						8,185,651						2,108,121						418,006						46,448			(9)						464,454						214,708
2020 & 2021 (4)						40,676,403						10,206,068						451,093						—									451,093						278,919
2021 (5)						41,455,845						11,027,751						410,778						—									410,778						279,400
2021 & 2022 (9)						75,406,975						20,284,551						—						141,992									141,992						$	507,114
2021 & 2022 (10)						33,815,842						9,079,729						237,868						—									237,868						$	303,761
Total						$	217,903,467					$	57,552,815					$	2,110,608					$	350,211								$	2,460,819					$	2,028,750		(11)

_______________________________________________________________________________

(3)Reinsurance coverage on new insurance written from January 1, 2019 through August 31, 2019.

(4)Reinsurance coverage on new insurance written from August 1, 2020 through March 31, 2021.

(5)Reinsurance coverage on new insurance written from April 1, 2021 through September 30, 2021.

(6)Coverage provided immediately above the coverage provided by Radnor Re 2018-1 Ltd.

(7)Coverage provided pari-passu to the coverage provided by Radnor Re 2019-1 Ltd.

(8)Coverage provided pari-passu to the coverage provided by Radnor Re 2020-1 Ltd.

(9)Reinsurance coverage on new insurance written from October 1, 2021 through December 31, 2022.

(10)Reinsurance coverage on new insurance written from October 1, 2021 through July 31, 2022.

(11)The total remaining first layer retention differs from the sum of the individual reinsurance transactions as a result of overlapping coverage between certain transactions.

Schedule of VIE Assets and Total Maximum Exposure to Loss

The following table presents total assets of each Radnor Re special purpose insurer as well as our maximum exposure to loss associated with each Radnor Re entity, representing the fair value of the embedded derivatives, using observable inputs in active markets (Level 2), included in other assets (other accrued liabilities) on our consolidated balance sheet and the estimated net present value of investment earnings on the assets in the reinsurance trusts, each as of December 31, 2022:

												Maximum Exposure to Loss
(In thousands)						Total VIE Assets						On - Balance Sheet						Off - Balance Sheet						Total
Radnor Re 2018-1 Ltd.						$	225,562					$	215					$	27					$	242
Radnor Re 2019-1 Ltd.						325,537						(2,080)						67						(2,013)
Radnor Re 2019-2 Ltd.						41,764						(1,450)						1						(1,449)
Radnor Re 2020-1 Ltd.						418,006						(1,398)						79						(1,319)
Radnor Re 2021-1 Ltd.						451,093						(4,441)						95						(4,346)
Radnor Re 2021-2 Ltd.						410,778						(2,772)						171						(2,601)
Radnor Re 2022-1 Ltd.						237,868						979						86						1,065
Total						$	2,110,608					$	(10,947)					$	526					$	(10,421)

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Tabular disclosure of the effects of reinsurance, for example, but not limited to, disclosure of direct, assumed, and ceded insurance.

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