Reinsurance and Insurance Loss Reserves

12 Months Ended

Apr. 03, 2021

Standard Casualty is primarily a specialty writer of manufactured home physical damage insurance. Certain of our premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The ceded reinsurance agreements provide increased capacity to write larger risks while maintaining exposure to loss within our capital resources. We remain obligated for amounts ceded in the event that the reinsurers do not meet their obligations. Substantially all of the assumed reinsurance is with one entity.

The effects of reinsurance on premiums written and earned were as follows (in thousands):


	Year Ended
	April 3, 2021				March 28, 2020
	Written		Earned		Written		Earned
Direct premiums	$	23,226	$	21,424	$	20,060	$	18,912
Assumed premiums—nonaffiliated	29,167		28,160		27,359		26,370
Ceded premiums—nonaffiliated	(12,604)		(12,604)		(12,598)		(12,598)
	$	39,789	$	36,980	$	34,821	$	32,684

Typical insurance policies written or assumed have a maximum coverage of $300,000 per claim, of which we cede $150,000 of the risk of loss per reinsurance. Therefore, our risk of loss is limited to $150,000 per claim on typical policies, subject to the reinsurers meeting their obligations. After this limit, amounts are recoverable through reinsurance for catastrophic losses in excess of $2.0 million per occurrence, up to a maximum of $55.0 million in the aggregate for that occurrence.

Purchasing reinsurance contracts mitigates the frequency and/or severity of losses incurred on insurance policies issued, such as in the case of a catastrophe that generates a large number of serious claims on multiple policies at the same time. Under these agreements, we may be required to repurchase and reestablish the reinsurance contracts for the remainder of the year to the extent that they have been utilized.

We have reinsurance reinstatement premium protection coverage, which will assist in reducing premium repurchase expense in the event of a catastrophic weather claim.

Standard Casualty establishes reserves for claims and claims expense on reported and unreported claims of non-reinsured losses. The following details the activity in the reserve for fiscal years 2021, 2020 and 2019 (in thousands):


	April 3, 2021		March 28, 2020		March 30, 2019
Balance at beginning of period	$	5,582	$	6,686	$	6,157
Net incurred losses during the year	23,041		16,961		16,179
Net claim payments during the year	(21,172)		(18,065)		(15,650)
Balance at end of period	$	7,451	$	5,582	$	6,686