Reinsurance Reinsurance

12 Months Ended

Dec. 31, 2016

Reinsurance [Abstract]

Reinsurance

Reinsurance

The Company’s wholly-owned Luxembourg subsidiary, Hollenfels Re SA (“Hollenfels”) provides reinsurance to third party insurance and reinsurance companies. As Hollenfels started its operations in 2016, all claims it experienced (reported or not reported) were from the 2016 accident year. During the twelve months ended December 31, 2016, Hollenfels’ share of incurred and paid claims, as reported to it by the underlying insurance and reinsurance companies, amounted to $10.9 million. For the same period, Hollenfels’ share of claims incurred but not reported plus expected development on reported claims totaled $3.5 million. Hollenfels generally employs an estimation methodology whereby historical average claims ratios over a period of 5 or 10 years, based on availability of data, are utilized. In cases where an event may have occurred that could give rise to claims in excess of the amount calculated using the above-mentioned methodology, then actuarial methods are used to calculate the impact of such an event. Hollenfels did not change its methodology for determining claim liability or claim adjustment expenses.

While Hollenfels typically settles its premiums and claim payments on a quarterly basis, the frequency of claims in the underlying policies is impractical for Hollenfels to obtain. This is because certain contracts Hollenfels has written are on a quota-share basis and others provide aggregate loss protection and the underlying information is not available for all contracts. Hollenfels did not discount any of its reserves and did not cede any portion of its exposures during the twelve months ended December 31, 2016. As a result, the figures above are the same as reported on the Company’s balance sheet.