Reinsurance

The following table contains a listing of direct, assumed, and ceded reinsurance amounts for premiums written, premiums earned, and loss and loss expenses incurred. For more information concerning reinsurance, refer to Note 8. “Reinsurance” in Item 8. “Financial Statements and Supplementary Data.” of our 2012 Annual Report.



	Quarter ended March 31,
($ in thousands)	2013			2012
Premiums written:
Direct	$	528,816		475,966
Assumed	8,482			21,989
Ceded	(87,174		)	(77,783	)
Net	$	450,124		420,172
Premiums earned:
Direct	$	494,066		451,988
Assumed	12,463			15,049
Ceded	(85,589		)	(88,208	)
Net	$	420,940		378,829
Loss and loss expense incurred:
Direct	$	365,646		252,203
Assumed	9,074			10,599
Ceded	(104,871		)	(9,896	)
Net	$	269,849		252,906

The growth in direct premium written ("DPW") for our ten insurance subsidiaries ("Insurance Subsidiaries") in First Quarter 2013 compared to First Quarter 2012 reflects: (i) pure price increases that we have achieved in our Standard Insurance Operations; and (ii) strong retention in our Standard Insurance Operations.

Direct premium earned increases in First Quarter 2013 were consistent with the fluctuation in DPW for the twelve-month period ended March 31, 2013 as compared to the twelve-month period ended March 31, 2012.

Assumed premiums written for First Quarter 2013 decreased compared to the same period last year as E&S business, which was previously written through a reinsurance agreement, is now written by our Insurance Subsidiaries. Decreases in assumed premiums earned in First Quarter 2013 compared to First Quarter 2012 were driven by the E&S premiums.

Direct loss and loss expense incurred in First Quarter 2013 included approximately $55 million of loss reserve increases for flood coverage under the NFIP related to Hurricane Sandy, which occurred in October 2012. Estimated gross flood losses related to Hurricane Sandy were $1,094 million at March 31, 2013 and $1,039 million at December 31, 2012. As all flood losses are fully ceded under the NFIP, the increase in the direct loss and loss expenses drive the corresponding increase in our ceded losses. The ceded premiums and losses related to our participation in the NFIP, under which 100% of our flood premiums, losses, and loss expenses are ceded to the NFIP, are as follows:



NFIP	Quarter ended March 31,
($ in thousands)	2013			2012
Ceded premiums written	$	(56,707	)	(51,724	)
Ceded premiums earned	(55,327		)	(51,905	)
Ceded loss and loss expense incurred	(76,176		)	14,922

In addition to the direct and ceded losses being higher in First Quarter 2013, 2012 reflects the fact that Hurricane Irene and Tropical Storm Lee claims were settled for less than their original estimates.