Reinsurance and Insurance Loss Reserves

3 Months Ended

Jul. 03, 2021

Certain of Standard Casualty's premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. We remain obligated for amounts ceded in the event that the reinsurers do not meet their obligations.

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


	Three Months Ended
	July 3, 2021				June 27, 2020
	Written		Earned		Written		Earned
Direct premiums	$	6,839	$	5,996	$	5,765	$	5,185
Assumed premiums—nonaffiliated	8,574		7,378		7,653		6,790
Ceded premiums—nonaffiliated	(3,647)		(3,647)		(3,202)		(3,202)
	$	11,766	$	9,727	$	10,216	$	8,773

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 million per occurrence, up to a maximum of $55 million in the aggregate for that occurrence.

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 the three months ended July 3, 2021 and June 27, 2020 (in thousands):


	Three Months Ended
	July 3, 2021		June 27, 2020
Balance at beginning of period	$	7,451	$	5,582
Net incurred losses during the year	7,975		5,982
Net claim payments during the year	(7,078)		(4,834)
Balance at end of period	$	8,348	$	6,730