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Reinsurance (Tables) | 6 Months Ended
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Jun. 30, 2024
Reinsurance Disclosures [Abstract] |
Schedule of Effects of Reinsurance | The effect of reinsurance on net premiums written and earned is as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(In thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Net premiums written: |  |  |  |  |  |  |  |
Direct |  | $ | 272,910 |  |  | $ | 249,167 |  |  | $ | 541,841 |  |  | $ | 488,658 |
Ceded (1) |  | (27,344) |  |  | (39,546) |  |  | (57,735) |  |  | (73,137) |
Net premiums written |  | $ | 245,566 |  |  | $ | 209,621 |  |  | $ | 484,106 |  |  | $ | 415,521 |
Net premiums earned: |  |  |  |  |  |  |  |
Direct |  | $ | 279,235 |  |  | $ | 252,775 |  |  | $ | 555,216 |  |  | $ | 497,624 |
Ceded (1) |  | (27,344) |  |  | (39,546) |  |  | (57,735) |  |  | (73,137) |
Net premiums earned |  | $ | 251,891 |  |  | $ | 213,229 |  |  | $ | 497,481 |  |  | $ | 424,487 |
(1)Net of profit commission. The following tables summarizes Essent Guaranty's quota share reinsurance agreements as of June 30, 2024:
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% |
QSR-2023 |  | January 1, 2023 - December 31, 2023 |  | 17.5% |  | 20% |  | 58% |
QSR-2024 |  | January 1, 2024 - December 31, 2024 |  | 15.0% |  | 20% |  | 57% |
_______________________________________________________________________________ (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 table summarizes Essent Guaranty's excess of loss coverages and retentions provided by insurance linked notes as of June 30, 2024:
|  |  |  | (In thousands) |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Deal Name | Vintage |  | Remaining Insurance in Force |  | Remaining Risk in Force |  | Remaining Reinsurance in Force |  | Remaining First Layer Retention | Optional Termination Date |  |
|  |  |  | Radnor Re 2021-1 | Aug. 2020 - Mar. 2021 |  | $ | 27,796,132 |  |  | $ | 7,390,779 |  |  | $ | 250,732 |  |  | $ | 278,227 |  | June 26, 2028 |  |
|  |  |  | Radnor Re 2021-2 | Apr. 2021 - Sep. 2021 |  | 32,876,424 |  |  | 9,007,485 |  |  | 301,015 |  |  | 277,770 |  | November 25, 2027 |  |
|  |  |  | Radnor Re 2022-1 | Oct. 2021 - Jul. 2022 |  | 29,790,115 |  |  | 8,096,398 |  |  | 209,409 |  |  | 302,032 |  | September 25, 2028 |  |
|  |  |  | Radnor Re 2023-1 | Aug. 2022 - Jun. 2023 |  | 29,594,148 |  |  | 8,102,672 |  |  | 281,462 |  |  | 281,434 |  | July 25, 2028 |  |
|  |  |  | Total |  |  | $ | 120,056,819 |  |  | $ | 32,597,334 |  |  | $ | 1,042,618 |  |  | $ | 1,139,463 |  |  |  |
The following table summarizes Essent Guaranty's excess of loss reinsurance coverages and retentions provided by panels of reinsurers as of June 30, 2024:
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |
Deal Name | Vintage |  | Remaining Insurance in Force |  | Remaining Risk in Force |  | Remaining Reinsurance in Force |  | Remaining First Layer Retention |  | Optional Termination Date |
XOL 2019-1 | Jan. 2018 - Dec. 2018 |  | $ | 5,024,587 |  |  | $ | 1,321,732 |  |  | $ | 76,144 |  |  | $ | 244,991 |  |  | February 25, 2026 |
XOL 2020-1 | Jan. 2019 - Aug. 2019 |  | 6,290,687 |  |  | 1,658,671 |  |  | 32,770 |  |  | 212,557 |  |  | January 25, 2027 |
XOL 2022-1 | Oct. 2021 - Dec. 2022 |  | 67,094,902 |  |  | 18,213,963 |  |  | 141,992 |  |  | 502,788 |  |  | January 1, 2030 |
XOL 2023-1 | Jan. 2023 - Dec. 2023 |  | 39,252,349 |  |  | 10,868,626 |  |  | 36,627 |  |  | 366,154 |  |  | January 1, 2028 |
Total |  |  | $ | 117,662,525 |  |  | $ | 32,062,992 |  |  | $ | 287,533 |  |  | $ | 1,326,490 |  |  |  |
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 condensed consolidated balance sheet and the estimated net present value of investment earnings on the assets in the reinsurance trusts, each as of June 30, 2024:
|  |  |  | Maximum Exposure to Loss
(In thousands) |  | Total VIE Assets |  | On - Balance Sheet |  | Off - Balance Sheet |  | Total
Radnor Re 2021-1 Ltd. |  | $ | 250,732 |  |  | $ | (5,098) |  |  | $ | 36 |  |  | $ | (5,062) |
Radnor Re 2021-2 Ltd. |  | 301,015 |  |  | (5,561) |  |  | 63 |  |  | (5,498) |
Radnor Re 2022-1 Ltd. |  | 209,409 |  |  | 74 |  |  | 44 |  |  | 118 |
Radnor Re 2023-1 Ltd. |  | 281,462 |  |  | 341 |  |  | 76 |  |  | 417 |
Total |  | $ | 1,042,618 |  |  | $ | (10,244) |  |  | $ | 219 |  |  | $ | (10,025) |

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- Definition Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-3 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 5A -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-5A Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-9 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 4 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-4 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481203/810-10-50-6 + Details
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