REINSURANCE

12 Months Ended

Dec. 31, 2023

(a)Reinsurance Assumed

NER SPC and NER Ltd. are the reinsurers of the Company’s operations. The reinsurance transactions are majorly structured as Modco arrangements with reinsurance funds withheld.

The following table summarized the Company’s reinsurance funds withheld, deposit liability, policyholders’ account balances and embedded derivatives by accounting classification related to its reinsurance business.


AS OF DEC. 31, 2023 US$ MILLIONS	Deposit accounting		Interest sensitive investment type		Total
Asset
Reinsurance funds withheld, net	$	1,538	$	5,741	$	7,279
Embedded derivatives	6		(52)		(46)
					7,233
Other reinsurance funds withheld1					15
Reinsurance funds withheld, total					$	7,248

Liability
Policyholders’ account balance, excluding embedded derivatives	$	—	$	7,530	$	7,530
Embedded derivatives	—		232		232
Policyholders’ account balance, total					$	7,762

Deposit liability	$	1,577	$	—	$	1,577

1.In addition to NER SPC and NER Ltd., Argo assumes certain forms of casualty risks, primarily asbestos and environmental liabilities, as part of their closed run-off business. Liabilities for such reinsurance assumed are included in “Policy and contract claims” in the statements of financial position. See Note 20 for details.


AS OF DEC. 31, 2022 US$ MILLIONS	Deposit accounting		Interest sensitive investment type		Total
Asset
Reinsurance funds withheld, net	$	1,603	$	4,055	$	5,658
Embedded derivatives	17		137		154
Reinsurance funds withheld, total					$	5,812

Liability
Policyholders’ account balance, excluding embedded derivatives	$	—	$	5,652	$	5,652
Embedded derivatives	—		181		181
Policyholders’ account balance, total					$	5,833

Deposit liability	$	1,657	$	—	$	1,657

(b)Reinsurance Ceded

The Company also reinsures its business through a diversified group of reinsurers. The Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements. The Company monitors trends in arbitration and any litigation outcomes with its reinsurers. Collectability of reinsurance balances is evaluated by monitoring ratings and the financial strength of its reinsurers. The effect of reinsurance on net premiums earned and claims incurred and policyholder benefits paid are as follows:


FOR THE YEARS ENDED DEC. 31 US$ MILLIONS	2023		2022		2021
Premiums earned:
Gross amounts, including reinsurance assumed	$	5,430	$	3,662	$	1,017
Reinsurance ceded	(1,293)		(651)		(1)
Net premiums earned	$	4,137	$	3,011	$	1,016

Policyholder benefits paid and claims incurred:
Gross amounts, including reinsurance assumed	$	(3,378)	$	(1,695)	$	(90)
Reinsurance ceded	830		384		18
Net benefits paid and claims incurred	$	(2,548)	$	(1,311)	$	(72)