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Reinsurance
 12 Months Ended
Dec. 31, 2024
Reinsurance Disclosures [Abstract]  
Reinsurance Reinsurance
Our Financial Statements reflect the effects of assumed and ceded reinsurance transactions. Assumed reinsurance refers to the acceptance of certain insurance risks that other insurance entities have underwritten. Ceded reinsurance involves transferring certain insurance risks (along with the related written and earned premiums) that we have underwritten to other insurance companies that agree to share these risks. The primary purpose of ceded reinsurance is to protect the Insurance Subsidiaries from potential losses in excess of the amount that we are willing to accept. Our major treaties covering property, property catastrophe, and casualty business are excess of loss contracts. We also entered into a catastrophe bond transaction to protect against certain named loss events, and use an intercompany quota share (proportional) pooling arrangement and other minor reinsurance treaties.

Effective December 9, 2023, we secured property catastrophe protection through a per occurrence excess of loss indemnity reinsurance agreement with High Point Re Ltd. ("High Point Re"), an independent Bermuda special purpose insurer. The reinsurance agreement meets the requirements to be accounted for as reinsurance in accordance with the guidance for reinsurance contracts. In connection with the reinsurance agreement, High Point Re issued Series 2023-1, Class A Principal-at-Risk Variable Rates Notes (“catastrophe bonds”) to unrelated investors totaling $325 million, consistent with the amount of coverage provided under the reinsurance agreement. Under the terms of the reinsurance agreement, we pay annual reinsurance premiums to High Point Re for the reinsurance coverage, which are included in our ceded premiums. The principal amount of the catastrophe bonds will be reduced by any amounts paid to us under the reinsurance agreement.

As a Standard Commercial Lines and E&S Lines writer, we are subject to the Terrorism Risk Insurance Program Reauthorization Act ("TRIPRA"), which was extended by Congress to December 31, 2027. TRIPRA requires private insurers and the U. S. government to share the risk of loss on future acts of terrorism certified by the U.S. Secretary of the Treasury. Under TRIPRA, each participating insurer is responsible for paying a deductible of specified losses before federal assistance is available. This deductible is based on a percentage of the prior year’s applicable Standard Commercial Lines and E&S Lines premiums. In 2025, our deductible, before tax, is approximately $619 million. For losses above the deductible, the federal government will pay 80% of losses to an industry limit of $100 billion, and the insurer retains 20%.

The Insurance Subsidiaries remain liable to policyholders to the extent that any reinsurer becomes unable to meet their contractual obligations. In addition to this direct counterparty credit risk, we have indirect counterparty credit risk as our reinsurers often enter into their own reinsurance programs, or retrocessions, as part of managing their exposure to large losses and improving their financial strength ratings. The credit quality of our reinsurers is also impacted by other factors, such as their reserve adequacy, investment portfolio, regulatory capital position, catastrophe aggregations, and risk management expertise. 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 December 31, 2024 and 2023:

December 31, 2024
($ in thousands)CurrentPast DueTotal Reinsurance Recoverables
Financial strength rating of rated reinsurers
A++$111,481 $225 $111,706 
A+483,317 5,205 488,522 
A131,087 819 131,906 
A-5,421 149 5,570 
Total rated reinsurers$731,306 $6,398 $737,704 
Non-rated reinsurers
Federal and state pools$318,785 $— $318,785 
Other than federal and state pools6,647 9 6,656 
Total non-rated reinsurers$325,432 $9 $325,441 
Total reinsurance recoverable, gross$1,056,738 $6,407 $1,063,145 
Less: ACL(2,000)
Total reinsurance recoverable, net$1,061,145 

December 31, 2023
($ in thousands)CurrentPast DueTotal Reinsurance Recoverables
Financial strength rating of rated reinsurers
A++$82,466 $21 $82,487 
A+371,132 2,887 374,019 
A111,883 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 pools4,488 77 4,565 
Total non-rated reinsurers$84,994 $77 $85,071 
Total reinsurance recoverable, gross$654,071 $4,454 $658,525 
Less: ACL(1,700)
Total reinsurance recoverable, net$656,825 

The $238.3 million increase in "Federal and state pools" as of December 31, 2024, compared to December 31, 2023, was primarily due to an increase in the NFIP reserves recorded as of December 31, 2024, for flood losses related to Hurricane Helene, which mainly affected the Southeastern part of our footprint. These losses are 100% ceded to the NFIP and continue to be paid as the associated claims are settled. In addition, the $164.3 million increase in "Total rated reinsurers" as of December 31, 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.

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

($ in thousands)December 31, 2024December 31, 2023
Balance at beginning of year$1,700 $1,600 
Current period change for expected credit losses300 100 
Write-offs charged against the allowance for credit losses— — 
Recoveries— — 
ACL, end of year$2,000 $1,700 

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."
The following table represents our total reinsurance balances segregated by reinsurer to illustrate our concentration of risk throughout our reinsurance portfolio:
 December 31, 2024As of December 31, 2023
($ in thousands)Reinsurance Balances% of Reinsurance BalanceReinsurance Balances% of Reinsurance Balance
Total reinsurance recoverables, net of allowance for credit losses$1,061,145  $656,825  
Total prepaid reinsurance premiums235,378  203,320  
Total reinsurance balance1,296,523  860,145  
Federal and state pools1:
    
NFIP471,696 36 %203,273 24 %
New Jersey Unsatisfied Claim Judgment Fund44,089 3 46,715 5 
Other2,418 — 1,779 — 
Total federal and state pools518,203 39 251,767 29 
Remaining reinsurance balance$778,320 61 $608,378 71 
Hannover Ruck SE (AM Best rated "A+")
$198,966 15 $135,564 16 
Munich Reinsurance America Inc. (AM Best rated "A+")
151,516 12 132,831 15 
AXIS Reinsurance Company (AM Best rated "A")91,862 7 76,286 9 
Endurance Assurance Corporation (AM Best rated “A+”)
40,717 3 27,246 3 
Ace Property & Casualty Insurance Company (AM Best rated “A++”)
30,166 2 13,602 2 
All other reinsurers267,093 22 224,549 26 
   Total reinsurers780,320 61 %610,078 71 %
Less: ACL(2,000)(1,700)
Reinsurers, net of ACL778,320 608,378 
Less: collateral2
(93,842)(126,418)
   Reinsurers, net of collateral$684,478 $481,960 
 1Considered to have minimal risk of default.
2Includes letters of credit, trust funds, and funds held against reinsurance recoverables.


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:

($ in thousands)202420232022
Premiums written:   
Direct$5,319,457 4,725,459 4,068,518 
Assumed27,557 23,999 32,320 
Ceded(717,013)(614,926)(527,248)
Net$4,630,001 4,134,532 3,573,590 
Premiums earned:   
Direct$5,034,952 4,386,556 3,880,522 
Assumed26,450 25,027 30,742 
Ceded(684,955)(583,977)(537,884)
Net$4,376,447 3,827,606 3,373,380 
Loss and loss expense incurred:   
Direct$3,909,463 2,738,301 2,537,638 
Assumed21,540 19,581 23,160 
Ceded(766,519)(273,597)(449,020)
Net$3,164,484 2,484,285 2,111,778 

Ceded premiums written, ceded premiums earned, and ceded loss and loss expense incurred related to our participation in the NFIP, to which we cede 100% of our NFIP flood premiums, losses, and loss expenses, were as follows:

Ceded to NFIP ($ in thousands)202420232022
Ceded premiums written$(356,957)(305,609)(259,246)
Ceded premiums earned(328,811)(279,087)(274,100)
Ceded loss and loss expense incurred(429,347)(75,549)(200,467)