Reinsurance

3 Months Ended

Mar. 31, 2023

We evaluate and monitor the financial condition of our reinsurers under voluntary reinsurance arrangements to minimize our exposure to significant losses from reinsurer insolvencies. The following tables provide (i) a disaggregation of our reinsurance recoverable balance by financial strength rating, and (ii) an aging analysis of our past due reinsurance recoverable balances as of March 31, 2023, and December 31, 2022:


	March 31, 2023
($ in thousands)	Current		Past Due		Total Reinsurance Recoverables
Financial strength rating of rated reinsurers
A++	$	80,787	$	356	$	81,143
A+	346,898		3,825		350,723
A	119,936		1,963		121,899
A-	3,686		89		3,775


Total rated reinsurers	$	551,307	$	6,233	$	557,540

Non-rated reinsurers
Federal and state pools	$	104,500	$	—	$	104,500
Other than federal and state pools	6,805		497		7,302
Total non-rated reinsurers	$	111,305	$	497	$	111,802

Total reinsurance recoverable, gross	$	662,612	$	6,730	$	669,342
Less: allowance for credit losses					(2,300)
Total reinsurance recoverable, net					$	667,042


	December 31, 2022
($ in thousands)	Current		Past Due		Total Reinsurance Recoverables
Financial strength rating of rated reinsurers
A++	$	46,282	$	1	$	46,283
A+	425,395		3,191		428,586
A	106,102		1,315		107,417
A-	7,148		89		7,237


Total rated reinsurers	$	584,927	$	4,596	$	589,523

Non-rated reinsurers
Federal and state pools	$	180,794	$	—	$	180,794
Other than federal and state pools	13,678		415		14,093
Total non-rated reinsurers	$	194,472	$	415	$	194,887

Total reinsurance recoverable, gross	$	779,399	$	5,011	$	784,410
Less: allowance for credit losses					(1,600)
Total reinsurance recoverable, net					$	782,810

The $76.3 million decrease in "Federal and state pools" as of March 31, 2023, compared to December 31, 2022, was primarily due to a decrease in the NFIP reserves recorded as of December 31, 2022 for flood losses in Florida and surrounding states as a result of Hurricane Ian, which are 100% ceded to the NFIP.

The following table provides a roll forward of the allowance for credit losses on our reinsurance recoverable balance for the periods indicated:


($ in thousands)	Quarter ended March 31,
	2023		2022
Balance at beginning of period	$	1,600	1,600
Current period change for expected credit losses	700		—

Write-offs charged against the allowance for credit losses	—		—
Recoveries	—		—
Allowance for credit losses, end of period	$	2,300	1,600

For a discussion of the methodology used to evaluate our estimate of expected credit losses on our reinsurance recoverable balance, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2022 Annual Report.

The following table lists direct, assumed, and ceded reinsurance amounts for premiums written, premiums earned, and loss and loss expense incurred for the indicated periods. For more information about reinsurance, refer to Note 9. “Reinsurance” in Item 8. “Financial Statements and Supplementary Data.” of our 2022 Annual Report.


	Quarter ended March 31,
($ in thousands)	2023		2022
Premiums written:
Direct	$	1,132,760	1,001,049
Assumed	5,394		5,314
Ceded	(138,386)		(116,565)
Net	$	999,768	889,798
Premiums earned:
Direct	$	1,032,228	931,376
Assumed	6,290		5,528
Ceded	(136,182)		(124,621)
Net	$	902,336	812,283
Loss and loss expenses incurred:
Direct	$	613,229	528,588
Assumed	5,255		4,278
Ceded	(51,046)		(38,630)
Net	$	567,438	494,236