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Reinsurance
 6 Months Ended
Jun. 30, 2014
Reinsurance Disclosures [Abstract]  
Reinsurance
Reinsurance

Reinsurance recoverable includes balances due from reinsurers for paid and unpaid losses and is presented net of an allowance for uncollectable reinsurance. The reinsurance recoverable balance is $455.3 million and $500.6 million as of June 30, 2014 and December 31, 2013, respectively. Other reinsurance activity is shown below.

Direct Business and Reinsurance:
Three Months Ended
 
Six Months Ended
($ in millions)
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
Direct premiums
$
18.1

 
$
22.3

 
$
35.6

 
$
42.1

Premiums ceded to non-affiliate reinsurers [1]
(13.4
)
 
(17.2
)
 
(28.1
)
 
(33.9
)
Premiums
$
4.7

 
$
5.1

 
$
7.5

 
$
8.2

 
 
 
 
 
 
 
 
Direct policy benefits incurred
$
41.9

 
$
42.3

 
$
79.8

 
$
97.4

Policy benefits assumed from non-affiliate reinsureds
—

 
—

 
0.1

 
—

Policy benefits ceded to:
 
 
 
 
 
 
 
  Affiliate reinsurers
(5.0
)
 
(9.0
)
 
(5.0
)
 
(9.0
)
  Non-affiliate reinsurers
(21.4
)
 
(14.4
)
 
(40.7
)
 
(34.0
)
Policy benefits ceded to reinsurers
(26.4
)
 
(23.4
)
 
(45.7
)
 
(43.0
)
Premiums paid to:
 
 
 
 
 
 
 
  Affiliate reinsurers
5.9

 
5.8

 
12.1

 
11.1

  Non-affiliate reinsurers
8.3

 
7.8

 
21.8

 
10.7

Premiums paid to reinsurers [2]
14.2

 
13.6

 
33.9

 
21.8

Policy benefits [3]
$
29.7

 
$
32.5

 
$
68.1

 
$
76.2

———————
[1]
Primarily represents premiums ceded to reinsurers related to term insurance policies.
[2]
For universal life and variable universal life contracts, premiums paid to reinsurers are reflected within policy benefits. See Note 2 to these interim unaudited financial statements for additional information regarding significant accounting policies.
[3]
Policy benefit amounts above exclude changes in reserves, interest credited to policyholders and other items, which total $51.3 million and $58.9 million, net of reinsurance, for the three months ended June 30, 2014 and 2013, respectively, and $89.0 million and $103.7 million, net of reinsurance, for the six months ended June 30, 2014 and 2013, respectively.

We remain liable to the extent that reinsuring companies may not be able to meet their obligations under reinsurance agreements in effect. Failure of the reinsurers to honor their obligations could result in losses to the Company. Since we bear the risk of nonpayment, on a quarterly basis we evaluate the financial condition of our reinsurers and monitor concentrations of credit risk. Based on our review of their financial statements, reputation in the reinsurance marketplace and other relevant information, we believe that we have no material exposure to uncollectible life reinsurance. At June 30, 2014, five major reinsurance companies, including our affiliate, Phoenix Life, account for approximately 74% of the reinsurance recoverable. Phoenix Life comprised approximately 16%, or $71.6 million, of this total reinsurance recoverable.