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Reinsurance | 9 Months Ended
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Sep. 30, 2012
Reinsurance Disclosures [Abstract] |
Reinsurance | Reinsurance The following table contains a listing of direct, assumed, and ceded reinsurance amounts for premiums written, premiums earned, and losses and loss expenses incurred. For more information concerning reinsurance, refer to Note 8. “Reinsurance” in Item 8. “Financial Statements and Supplementary Data.” in our 2011 Annual Report.
|  | Quarter ended September 30, |  | Nine Months ended September 30,
($ in thousands) |  | 2012 |  | 2011 |  | 2012 |  | 2011
Premiums written: |  |  |  |  |  |  |  |  |  |  |  |
Direct |  | $ | 520,943 |  |  | 453,768 |  |  | 1,504,429 |  |  | 1,324,705 |
Assumed |  | 17,976 |  |  | 22,575 |  |  | 44,712 |  |  | 29,765 |
Ceded |  | (88,401 | ) |  | (79,511 | ) |  | (252,888 | ) |  | (221,300 | )
Net |  | $ | 450,518 |  |  | 396,832 |  |  | 1,296,253 |  |  | 1,133,170 |
Premiums earned: |  |  |  |  |  |  |  |  |  |  |  |
Direct |  | $ | 474,055 |  |  | 425,231 |  |  | 1,389,373 |  |  | 1,257,087 |
Assumed |  | 18,595 |  |  | 7,626 |  |  | 49,683 |  |  | 18,866 |
Ceded |  | (86,425 | ) |  | (73,894 | ) |  | (261,790 | ) |  | (210,067 | )
Net |  | $ | 406,225 |  |  | 358,963 |  |  | 1,177,266 |  |  | 1,065,886 |
Losses and loss expenses incurred: |  |  |  |  |  |  |  |  |  |  |  |
Direct |  | $ | 327,883 |  |  | 638,219 |  |  | 881,537 |  |  | 1,204,586 |
Assumed |  | 13,970 |  |  | 5,977 |  |  | 35,039 |  |  | 13,549 |
Ceded |  | (69,602 | ) |  | (338,238 | ) |  | (103,516 | ) |  | (388,416 | )
Net |  | $ | 272,251 |  |  | 305,958 |  |  | 813,060 |  |  | 829,719 |
Direct premium written ("DPW") increases in both Third Quarter and Nine Months 2012 were attributable to our newly acquired E&S business, higher new business, and higher renewal premiums reflecting increases in renewal pure price in our standard insurance operations. Direct premium earned increases in Third Quarter and Nine Months 2012 were consistent with the fluctuation in DPW for the twelve-month period ended September 30, 2012 as compared to the twelve-month period ended September 30, 2011. Assumed premiums written for Third Quarter 2012 decreased compared to the same period last year as E&S business, which was previously written through a reinsurance agreement, is now written by one of our ten insurance subsidiaries ("Insurance Subsidiaries"). A fronting arrangement was in place during the second half of 2011 to write E&S business that we acquired through the purchase of a renewal book of business in August 2011. Assumed E&S premiums from this renewal book continued until April 2012, when our recently-acquired Insurance Subsidiary, MUSIC, became the direct writer of this business. Increases in assumed premiums earned in Third Quarter and Nine Months 2012 compared to the prior year periods were driven by the E&S premiums. Direct losses and loss expenses incurred were significantly impacted by decreases in flood losses that are ceded under the NFIP program, as well as decreases in catastrophe losses of $57.9 million, to $9.6 million, in Third Quarter 2012 and $65.7 million, to $46.7 million, in Nine Months 2012, compared to the prior year periods. Flood losses decreased absent the significant flooding that was experienced in 2011 as a result of Tropical Storm Lee and, to a lesser extent, Hurricane Irene. As the flood losses are fully ceded under the NFIP program, the reduction in the direct losses and loss expenses drive the corresponding decrease in our ceded losses. The ceded premiums and losses related to our involvement with the NFIP, in which all of our Flood premiums, losses, and loss expenses are ceded to the NFIP, are as follows:
National Flood Insurance Program |  | Quarter ended September 30, |  | Nine Months ended September 30,
($ in thousands) |  | 2012 |  | 2011 |  | 2012 |  | 2011
Ceded premiums written |  | $ | (58,923 | ) |  | (55,198 | ) |  | (171,172 | ) |  | (158,777 | )
Ceded premiums earned |  | (53,222 | ) |  | (50,256 | ) |  | (157,895 | ) |  | (147,111 | )
Ceded losses and loss expenses incurred |  | $ | (32,702 | ) |  | (301,725 | ) |  | (24,534 | ) |  | (331,604 | )

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- Definition The entire disclosure pertaining to the existence, magnitude and information about insurance that has been ceded to or assumed from another insurance company, including the methodologies and assumptions used in determining recorded amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6486672&loc=d3e27374-158547 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 310 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6485557&loc=d3e21549-158491 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6486672&loc=d3e27261-158547 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 55 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6588590&loc=d3e27703-158548 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 6 -Article 7 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6480758&loc=d3e6811-158387 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 55 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=6588590&loc=d3e27795-158548 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 113 -Paragraph 27 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03.6,13) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 113 -Paragraph 120 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 13 -Article 7 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6480758&loc=d3e6816-158387 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 92-5 -Paragraph 19 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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