Alleghany’s reinsurance and insurance subsidiaries reinsure portions of the risks they underwrite in order to reduce the effect of individual or aggregate exposure to losses, manage capacity, protect capital resources, reduce volatility in specific lines of business, improve risk-adjusted portfolio returns and enable them to increase gross premium writings and risk capacity without requiring additional capital. Alleghany’s reinsurance and insurance subsidiaries generally purchase reinsurance and retrocessional coverages from highly-rated, third-party reinsurers. If the assuming reinsurers are unable or unwilling to meet the obligations assumed under the applicable reinsurance agreements, Alleghany’s reinsurance and insurance subsidiaries would remain liable for such reinsurance portion not paid by these reinsurers. As such, funds, trust agreements and letters of credit are held to collateralize a portion of Alleghany’s reinsurance recoverables and Alleghany’s reinsurance and insurance subsidiaries reinsure portions of the risks they underwrite or assume with multiple reinsurance programs.

Amounts recoverable from reinsurers are recognized in a manner consistent with the claims liabilities associated with the reinsurance placement and presented on the balance sheet as reinsurance recoverables. Such balances as of December 31, 2019 and 2018 are presented in the table below:

	As of December 31,
	2019		2018
	($ in millions)
Reinsurance recoverables on paid losses	$	98.1	$	63.9
Ceded outstanding loss and LAE		1,583.9		1,857.4
Total	$	1,682.0	$	1,921.3

The following table presents information regarding concentration of Alleghany’s reinsurance recoverables and the ratings profile of its reinsurers as of December 31, 2019:

Reinsurer⁽¹⁾	Rating⁽²⁾	Amount		Percentage
		($ in millions)
Syndicates at Lloyd's of London	A (Excellent)	$	134.7		8.0	%
Kane SAC Ltd, Rondout Segregated Account⁽³⁾	not rated		134.6		8.0	%
PartnerRe Ltd	A (Excellent)		95.1		5.7	%
Swiss Reinsurance Company	A+ (Superior)		91.7		5.5	%
Fairfax Financial Holdings Ltd	A (Excellent)		89.6		5.3	%
Kane SAC Ltd, Bowery Segregated Account⁽³⁾	not rated		86.4		5.1	%
Third Point Reinsurance Group	A- (Excellent)		81.1		4.8	%
RenaissanceRe Holdings Ltd	A+ (Superior)		79.8		4.8	%
W.R. Berkley Corporation	A+ (Superior)		68.4		4.1	%
Liberty Mutual	A (Excellent)		60.7		3.6	%
All other reinsurers			759.9		45.1	%
Total reinsurance recoverables⁽⁴⁾		$	1,682.0		100.0	%
Secured reinsurance recoverables⁽³⁾		$	680.5		40.5	%

Alleghany had no allowance for uncollectible reinsurance as of December 31, 2019 and 2018.

Reinsured loss and LAE ceded included in Alleghany’s consolidated statements of earnings were $407.7 million, $628.2 million and $777.4 million for 2019, 2018 and 2017, respectively.

The following table presents property and casualty premiums written and earned for 2019, 2018 and 2017:

	Year Ended December 31,
	2019			2018			2017
	($ in millions)
Gross premiums written – direct	$	1,800.3		$	1,537.8		$	1,528.7
Gross premiums written – assumed		4,856.1			4,357.8			4,168.2
Ceded premiums written		(904.7	)		(847.2	)		(731.0	)
Net premiums written	$	5,751.7		$	5,048.4		$	4,965.9
Gross premiums earned – direct	$	2,114.1		$	1,935.3		$	1,932.0
Gross premiums earned – assumed		4,268.8			3,881.4			3,790.3
Ceded premiums earned		(904.8	)		(840.5	)		(767.3	)
Net premiums earned	$	5,478.1		$	4,976.2		$	4,955.0

Alleghany’s reinsurance and insurance subsidiaries reinsure portions of the risks they underwrite or assume with multiple reinsurance programs. A summary of the more significant programs follows.

TransRe enters into various retrocession arrangements, including property catastrophe retrocession contracts, to manage the effects of individual or aggregate exposure to losses, reduce volatility in specific lines of business, improve risk-adjusted portfolio returns, strengthen its market position and enhance capital efficiency. These include excess-of-loss and quota share treaties in traditional rated form as well as catastrophe bonds and other collateralized insurance-linked structures. TransRe’s retrocession protections generally have a one-year term and renewal dates occur throughout the year, with the majority renewing at January 1 and June 1. The catastrophe bonds, however, have a four-year term, with maturities in 2022 and 2023.

RSUI reinsures its property lines of business through a program consisting of surplus share treaties, facultative placements, and per risk and catastrophe excess-of-loss treaties. RSUI’s catastrophe reinsurance program and property per risk reinsurance program each run on an annual basis from May 1 to the following April 30 and portions expired on April 30, 2019. Both programs were renewed on May 1, 2019 with substantially similar terms as the expired programs.

AIHL Re and CapSpecialty entered into an intercompany reinsurance contract, effective July 1, 2015, pursuant to which AIHL Re provides CapSpecialty with coverage primarily for adverse development on certain net loss and allocated LAE in excess of its carried reserves at June 30, 2015. AIHL Re’s commitments are intended to cover the statutory collateral requirements at CapSpecialty, if and when necessary, and AIHL Re’s obligations are subject to an aggregate limit of $50.0 million. In connection with such intercompany reinsurance agreement, Alleghany and AIHL Re entered into a contract whereby Alleghany will guarantee the recoverable balances owed to CapSpecialty from AIHL Re up to $50.0 million. The above agreements had no impact on Alleghany’s consolidated results of operations and financial condition.