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Reinsurance | 9 Months Ended
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Sep. 30, 2024
Reinsurance Disclosures [Abstract] |
Reinsurance | Reinsurance 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 September 30, 2024, and December 31, 2023:
|  | September 30, 2024
($ in thousands) |  | Current |  | Past Due |  | Total Reinsurance Recoverables
Financial strength rating of rated reinsurers |  |  |  |  |  |
A++ |  | $ | 109,343 |  |  | 579 |  |  | 109,922 |
A+ |  | 475,190 |  |  | 997 |  |  | 476,187 |
A |  | 137,194 |  |  | 413 |  |  | 137,607 |
A- |  | 5,592 |  |  | 89 |  |  | 5,681 |
Total rated reinsurers |  | 727,319 |  |  | 2,078 |  |  | 729,397 |
Non-rated reinsurers |  |  |  |  |  |
Federal and state pools |  | 325,080 |  |  | — |  |  | 325,080 |
Other than federal and state pools |  | 4,679 |  |  | 95 |  |  | 4,774 |
Total non-rated reinsurers |  | 329,759 |  |  | 95 |  |  | 329,854 |
Total reinsurance recoverable, gross |  | $ | 1,057,078 |  |  | 2,173 |  |  | 1,059,251 |
Less: allowance for credit losses |  |  |  |  |  | (2,000) |
Total reinsurance recoverable, net |  |  |  |  |  | 1,057,251 |
|  | December 31, 2023
($ in thousands) |  | Current |  | Past Due |  | Total Reinsurance Recoverables
Financial strength rating of rated reinsurers |  |  |  |  |  |
A++ |  | $ | 82,466 |  |  | 21 |  |  | 82,487 |
A+ |  | 371,132 |  |  | 2,887 |  |  | 374,019 |
A |  | 111,883 |  |  | 1,380 |  |  | 113,263 |
A- |  | 3,596 |  |  | 89 |  |  | 3,685 |
Total rated reinsurers |  | 569,077 |  |  | 4,377 |  |  | 573,454 |
Non-rated reinsurers |  |  |  |  |  |
Federal and state pools |  | 80,506 |  |  | — |  |  | 80,506 |
Other than federal and state pools |  | 4,488 |  |  | 77 |  |  | 4,565 |
Total non-rated reinsurers |  | 84,994 |  |  | 77 |  |  | 85,071 |
Total reinsurance recoverable, gross |  | $ | 654,071 |  |  | 4,454 |  |  | 658,525 |
Less: allowance for credit losses |  |  |  |  |  | (1,700) |
Total reinsurance recoverable, net |  |  |  |  |  | 656,825 |
The $244.6 million increase in "Federal and state pools" as of September 30, 2024, compared to December 31, 2023, was primarily due to reserves recorded in Third Quarter 2024 from our participation in the NFIP Write Your Own Program, driven by Hurricane Helene flood losses, which impacted the Southeastern states of our footprint. These losses are 100% ceded to the NFIP. In addition, the $155.9 million increase in "Total rated reinsurers" as of September 30, 2024, compared to December 31, 2023, was primarily related to an increase in incurred but not reported recoverable balances related to unfavorable prior year casualty reserve development recorded in Nine Months 2024. The following table provides a roll forward of the allowance for credit losses on our reinsurance recoverable balance for the periods indicated:
|  | Quarter ended September 30, |  | Nine Months ended September 30,
($ in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Balance at beginning of period |  | $ | 1,700 |  |  | 1,800 |  |  | $ | 1,700 |  |  | 1,600 |
Current period change for expected credit losses |  | 300 |  |  | — |  |  | 300 |  |  | 200 |
Write-offs charged against the allowance for credit losses |  | — |  |  | — |  |  | — |  |  | — |
Recoveries |  | — |  |  | — |  |  | — |  |  | — |
Allowance for credit losses, end of period |  | $ | 2,000 |  |  | 1,800 |  |  | $ | 2,000 |  |  | 1,800 |
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 2023 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 2023 Annual Report.
|  | Quarter ended September 30, |  | Nine Months ended September 30,
($ in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Premiums written: |  |  |  |  |  |  |  |
Direct |  | $ | 1,335,475 |  |  | 1,214,444 |  |  | $ | 4,051,124 |  |  | 3,579,700 |
Assumed |  | 7,611 |  |  | 9,087 |  |  | 20,009 |  |  | 20,058 |
Ceded |  | (185,446) |  |  | (165,206) |  |  | (530,771) |  |  | (456,758) |
Net |  | 1,157,640 |  |  | 1,058,325 |  |  | 3,540,362 |  |  | 3,143,000 |
Premiums earned: |  |  |  |  |  |  |  |
Direct |  | 1,279,783 |  |  | 1,123,444 |  |  | 3,727,847 |  |  | 3,229,170 |
Assumed |  | 6,972 |  |  | 8,916 |  |  | 18,942 |  |  | 21,174 |
Ceded |  | (174,527) |  |  | (150,443) |  |  | (503,386) |  |  | (423,941) |
Net |  | 1,112,228 |  |  | 981,917 |  |  | 3,243,403 |  |  | 2,826,403 |
Loss and loss expense incurred: |  |  |  |  |  |  |  |
Direct |  | 1,194,224 |  |  | 741,288 |  |  | 2,957,610 |  |  | 2,053,511 |
Assumed |  | 6,104 |  |  | 8,182 |  |  | 17,143 |  |  | 19,115 |
Ceded |  | (434,670) |  |  | (103,573) |  |  | (579,255) |  |  | (213,161) |
Net |  | $ | 765,658 |  |  | 645,897 |  |  | $ | 2,395,498 |  |  | 1,859,465 |
The increase in direct and ceded loss and loss expense incurred in Third Quarter 2024 and Nine Months 2024 compared to the same prior-year periods included a $232.8 million increase of NFIP reserves recorded in Third Quarter 2024 for flood losses as a result of Hurricane Helene, which are 100% ceded to the NFIP. In addition, the increase in direct loss and loss expense incurred in Nine Months 2024 compared to Nine Months 2023 was further impacted by unfavorable prior year casualty reserve development of $211.0 million in Nine Months 2024, compared to $16.5 million of favorable development in Nine Months 2023.

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