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Reinsurance | 12 Months Ended
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Dec. 31, 2022
Insurance [Abstract] |
Reinsurance | 11. Reinsurance The Company cedes risk to unrelated reinsurers on a pro rata (“quota share”) and excess of loss basis in the ordinary course of business to limit its net loss exposure on insurance contracts. Reinsurance ceded arrangements do not discharge the Company of primary liability. Moreover, reinsurers may fail to pay the Company due to a lack of reinsurer liquidity, perceived improper underwriting, and losses for risks that are excluded from reinsurance coverage and other similar factors, all of which could adversely affect the Company’s financial results. The Company had the following reinsurance balances as of December 31, 2022 and 2021:
(Dollars in thousands) |  | December 31, 2022 |  |  | December 31, 2021 |
Reinsurance receivables, net |  | $ | 85,721 |  |  | $ | 99,864 |
Collateral securing reinsurance receivables |  |  | (8,937 | ) |  |  | (9,855 | )
Reinsurance receivables, net of collateral |  | $ | 76,784 |  |  | $ | 90,009 |
Allowance for expected credit losses |  | $ | 8,992 |  |  | $ | 8,992 |
Prepaid reinsurance premiums |  |  | 17,421 |  |  |  | 53,494 |
As of December 31, 2022, the Company had one aggregate unsecured reinsurance receivables that exceeded 3% of shareholders’ equity from the following reinsurer. Unsecured reinsurance receivables include amounts receivable for paid and unpaid losses and loss adjustment expenses, less amounts secured by collateral.
(Dollars in thousands) |  | Reinsurance Receivables |  |  | AM Best Ratings (As of December 31, 2022)
Munich Re America Corporation |  | $ | 45,246 |  |  | A+
The effect of reinsurance on premiums written and earned is as follows:
(Dollars in thousands) |  | Written |  |  | Earned |
For the year ended December 31, 2022: |  |  |  |  |  |
Direct business |  | $ | 573,412 |  |  | $ | 589,131 |
Reinsurance assumed |  |  | 154,191 |  |  |  | 135,896 |
Reinsurance ceded |  |  | (136,272 | ) |  |  | (122,556 | )
Net premiums |  | $ | 591,331 |  |  | $ | 602,471 |
For the year ended December 31, 2021: |  |  |  |  |  |
Direct business |  | $ | 584,467 |  |  | $ | 578,171 |
Reinsurance assumed |  |  | 97,655 |  |  |  | 78,880 |
Reinsurance ceded |  |  | (102,054 | ) |  |  | (61,441 | )
Net premiums |  | $ | 580,068 |  |  | $ | 595,610 |
For the year ended December 31, 2020: |  |  |  |  |  |
Direct business |  | $ | 554,617 |  |  | $ | 560,658 |
Reinsurance assumed |  |  | 51,986 |  |  |  | 69,312 |
Reinsurance ceded |  |  | (58,436 | ) |  |  | (62,271 | )
Net premiums |  | $ | 548,167 |  |  | $ | 567,699 |
Ceded losses and loss adjustment expenses incurred were $48.7 million, $34.9 million, and $61.8 million for the years ended December 31, 2022, 2021, and 2020, respectively.

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- Definition The entire disclosure pertaining to the existence, magnitude and information about insurance that has been ceded to or assumed from another insurance company, including the methodologies and assumptions used in determining recorded amounts. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 55 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=99379264&loc=d3e27830-158548 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 20 -Section 50 -Paragraph 3 -URI https://asc.fasb.org/extlink&oid=99397103&loc=d3e6811-158387 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -URI https://asc.fasb.org/topic&trid=2303980 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 20 -Section 50 -Paragraph 4 -URI https://asc.fasb.org/extlink&oid=99397103&loc=d3e6816-158387 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 605 -Section 55 -Paragraph 12 -URI https://asc.fasb.org/extlink&oid=99379264&loc=d3e27758-158548 + Details
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