Related Party Transactions

3 Months Ended

Mar. 31, 2023

Westaim

As of March 31, 2023 and December 31, 2022, Westaim and Westaim HIIG LP owned 39.0% and 44.5%, respectively, of the Company’s common stock. The changes in ownership percentage were primarily due to the IPO and conversion of preferred stock to common stock.

The Company’s investment in Westaim is included in equity securities on the consolidated balance sheets. The unrealized loss on this investment as of March 31, 2023 and December 31, 2022 were $1.5 million and $2.3 million, respectively.

Prior to the closing of the IPO, Westaim performed consulting and certain other services for the Company pursuant to a Management Services Agreement. This agreement terminated pursuant to its terms upon the closing of the IPO.

RISCOM

RISCOM provides the Company with wholesale brokerage services. RISCOM and the Company also have a managing general agency agreement. The Company holds a 20% ownership interest in RISCOM.

Net earned premium and gross commission expense related to these agreements for the three months ended March 31, 2023 and 2022 were as follows:



($ in thousands)	2023		2022
Net earned premium	$	22,185	$	21,018
Commissions	6,853		7,348

Premiums receivable as of March 31, 2023 and December 31, 2022 were $17.6 million and $9.9 million, respectively.

Reinsurance

The Company has reinsurance agreements with Everest Re, an affiliate of Mt. Whitney Securities, LLC, which was a limited partner of Westaim HIIG LP through November 30, 2022, and holder of preferred shares. During the three months ended March 31, 2023, Mt. Whitney Securities divested their entire ownership of the Company’s equity securities. Reinsurance premiums ceded during the three months ended March 31, 2022 related to the agreement were $19.6 million. Reinsurance recoverable from Everest Re, net of premium payables at December 31, 2022 were $177.5 million.

Other

Advisory and professional services fees and expense reimbursements paid to various affiliated shareholders and directors for the three months ended March 31, 2023 and 2022 were $2.1 million and $0.7 million, respectively.

See Note 4 and 5 for investments involving affiliated companies and additional related party transactions.