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REINSURANCE
 3 Months Ended
Mar. 31, 2024
Insurance [Abstract]  
REINSURANCE REINSURANCE
Global Atlantic maintains a number of reinsurance treaties with third parties whereby Global Atlantic assumes annuity and life policies on a coinsurance, modified coinsurance or funds withheld basis. Global Atlantic also maintains other reinsurance treaties including the cession of certain annuity, life and health policies.
The effects of all reinsurance agreements on the consolidated statements of financial condition were as follows:
March 31, 2024December 31, 2023
Policy liabilities:
Direct$78,687,136 $75,715,857 
Assumed94,911,550 84,342,414 
Total policy liabilities173,598,686 160,058,271 
Ceded(1)
(43,953,900)(35,773,958)
Net policy liabilities$129,644,786 $124,284,313 
(1)Reported within reinsurance recoverable within the consolidated statements of financial condition.
A key credit quality indicator is a counterparty’s AM Best financial strength rating. A.M. Best ratings are an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. Global Atlantic mitigates counterparty credit risk by requiring collateral and credit enhancements in various forms including engaging in funds withheld at interest and modified coinsurance transactions. The following shows the amortized cost basis of Global Atlantic’s reinsurance recoverable and funds withheld receivable at interest by credit quality indicator and any associated credit enhancements Global Atlantic has obtained to mitigate counterparty credit risk:
As of March 31, 2024 As of December 31, 2023
A.M. Best Rating(1)
Reinsurance recoverable and funds withheld receivable at interest
Credit enhancements(2)
Net reinsurance credit exposure(3)
Reinsurance recoverable and funds withheld receivable at interest
Credit enhancements(2)
Net reinsurance credit exposure(3)
A++$44,895 $— $44,895 $38,857 $— $38,857 
A+1,779,822 — 1,779,822 1,801,954 — 1,801,954 
A2,223,845 — 2,223,845 2,212,800 — 2,212,800 
A-4,259,094 3,728,593 530,501 4,430,484 3,814,976 615,508 
B++1,065 — 1,065 589 — 589 
B+— — — — — — 
B— — — — — — 
B-— — — — — — 
C++/C+(228)— — (228)— — 
Not rated or private rating(4)
38,537,428 38,911,132 — 30,859,068 30,210,350 648,718 
Total$46,845,921 $42,639,725 $4,580,128 $39,343,524 $34,025,326 $5,318,426 
(1)Ratings are periodically updated (at least annually) as A.M. Best issues new ratings.
(2)Credit enhancements primarily include funds withheld payable at interest.
(3)Includes credit loss allowance of $24.8 million and $21.0 million as of March 31, 2024 and December 31, 2023, respectively, held against reinsurance recoverable and funds withheld receivable at interest.
(4)Includes $38.5 billion and $30.8 billion as of March 31, 2024 and December 31, 2023, respectively, associated with cessions to co-investment vehicles (the "sponsored reinsurance sidecar vehicles") that participate in qualifying reinsurance transactions sourced by Global Atlantic.
As of both March 31, 2024 and December 31, 2023, Global Atlantic had $2.7 billion of funds withheld receivable at interest with six counterparties related to modified coinsurance and funds withheld contracts. The assets supporting the funds withheld receivable at interest balance are held in trusts for the benefit of Global Atlantic.
The effects of reinsurance on the consolidated statements of operations were as follows:
Three Months Ended March 31,
20242023
Net premiums:
Direct$34,863 $32,653 
Assumed9,109,378 618,730 
Ceded(3,107,719)(177,759)
Net premiums$6,036,522 $473,624 

Three Months Ended March 31,
20242023
Policy fees:
Direct$226,322 $227,857 
Assumed174,418 104,589 
Ceded(71,793)(18,644)
Net policy fees$328,947 $313,802 

Three Months Ended March 31,
20242023
Net policy benefits and claims:
Direct$844,660 $948,119 
Assumed9,899,999 1,016,936 
Ceded(3,483,590)(438,001)
Net policy benefits and claims$7,261,069 $1,527,054 

Global Atlantic holds collateral for and provides collateral to its reinsurance clients. Global Atlantic held $45.1 billion and $36.7 billion of collateral in the form of funds withheld payable at interest on behalf of its reinsurers as of March 31, 2024 and December 31, 2023, respectively. As of both March 31, 2024 and December 31, 2023, reinsurers held collateral of $1.2 billion on behalf of Global Atlantic. A significant portion of the collateral that Global Atlantic provides to its reinsurance clients is provided in the form of assets held in a trust for the benefit of the counterparty. As of March 31, 2024 and December 31, 2023, these trusts held in excess of the $92.9 billion and $81.8 billion of assets they are required to hold in order to support reserves of $90.0 billion and $79.4 billion, respectively. Of the cash held in trust, Global Atlantic classified $75.1 million and $90.8 million as restricted as of March 31, 2024 and December 31, 2023, respectively.