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 the periods indicated. 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 June 30,					Six Months ended June 30,
($ in thousands)	2013			2012		2013		2012
Premiums written:
Direct	$	551,190		507,520		1,080,006		983,486
Assumed	4,378			4,747		12,860		26,736
Ceded	(93,391		)	(86,704	)	(180,565	)	(164,487	)
Net	$	462,177		425,563		912,301		845,735
Premiums earned:
Direct	$	504,081		463,330		998,147		915,318
Assumed	8,951			16,039		21,414		31,088
Ceded	(86,780		)	(87,157	)	(172,369	)	(175,365	)
Net	$	426,252		392,212		847,192		771,041
Loss and loss expense incurred:
Direct	$	338,954		301,451		704,600		553,654
Assumed	6,420			10,470		15,494		21,069
Ceded	(65,780		)	(24,018	)	(170,651	)	(33,914	)
Net	$	279,594		287,903		549,443		540,809

The growth in direct premium written ("DPW") for our ten insurance subsidiaries ("Insurance Subsidiaries") in both Second Quarter and Six Months 2013 compared to Second Quarter and Six Months 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 premiums earned increases in Second Quarter and Six Months 2013 were consistent with the fluctuation in DPW for the twelve-month period ended June 30, 2013 as compared to the twelve-month period ended June 30, 2012.

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

Direct loss and loss expense incurred in Six Months 2013 included an increase of approximately $75 million related to flood losses covered under the NFIP for Hurricane Sandy, which occurred in October 2012. Total estimated gross flood losses for this storm were $1,127 million at June 30, 2013 and $1,052 million at December 31, 2012, of which approximately $1,108 million was paid through June 30, 2013.

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 June 30,					Six Months ended June 30,
($ in thousands)	2013			2012		2013		2012
Ceded premiums written	$	(62,461	)	(60,525	)	(119,168	)	(112,249	)
Ceded premiums earned	(56,450		)	(52,768	)	(111,777	)	(104,673	)
Ceded loss and loss expense incurred	(51,725		)	(6,754	)	(127,901	)	8,168

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