Reinsurance (Tables)

12 Months Ended

Dec. 31, 2011

Credit Quality Distribution of Reinsurance Recoverables for Ceded Paid and Unpaid Losses and Loss Adjustment Expenses and Ceded Unearned Premiums Based On Insurer Financial Strength Ratings from A. M. Best or S&P

The credit quality distribution of our reinsurance recoverables of $1.05 billion as of December 31, 2011 for ceded paid and unpaid losses and loss adjustment expenses and ceded unearned premiums based on insurer financial strength ratings from A. M. Best or S&P was as follows:

	September 30,		September 30,		September 30,
				Percent of
In thousands	Rating	Fair Value(2)		Total(3)
A.M. Best Rating description (1) :
Superior	A++, A+	$	535,060		51	%
Excellent	A, A-		505,314		48	%
Very good	B++, B+		552		0	%
Not rated	NR		12,472		1	%
Total		$	1,053,398		100	%

(1) — Equivalent S&P rating used for certain companies when an A.M. Best rating was unavailable.

(2) — Net of reserve for uncollectible reinsurance of approximately $13.0 million. The fair value consists of reinsurance recoverables on paid losses due within 30-45 days and reinsurance on unpaid losses which by nature of our reserving process is our best estimate of the value as of December 31, 2011.

(3) — The Company holds offsetting collateral of approximately 16.8%, including 50.5% for B++ and B+ companies and 62.5% for not rated companies which includes letters of credit, ceded balances payable and other balances held by our Insurance Companies and our Lloyd’s Operations.

Lists of 20 Largest Reinsurers Measured by Reinsurance Recoverable

The following table lists our 20 largest reinsurers measured by the amount of reinsurance recoverable for ceded losses and loss adjustment expense and ceded unearned premium (constituting approximately 74.7% of the total recoverable), together with the reinsurance recoverable and collateral as of December 31, 2011, and the reinsurers’ rating from the indicated rating agency:

		September 30,		September 30,		September 30,		September 30,	September 30,	September 30,
	Reinsurance Recoverables
In thousands	Unearned Premium		Paid/Unpaid Losses		Total(1)		Collateral Held(2)		AMB	S&P
Munich Reinsurance America Inc.	$	11,286	$	78,562	$	89,848	$	386	A+	AA-
Everest Reinsurance Company		14,528		75,094		89,622		6,634	A+	A+
Swiss Reinsurance America Corporation		4,730		84,343		89,073		8,041	A+	AA-
Transatlantic Reinsurance Company		15,177		71,530		86,707		6,416	A	A+
National Indemnity Company		15,591		37,251		52,842		5,774	A++	AA+
Partner Reinsurance Europe		7,227		32,682		39,909		20,272	A+	AA-
Berkley Insurance Company		1,755		31,278		33,033		243	A+	A+
Scor Holding (Switzerland) AG		2,234		29,822		32,056		7,754	A	A
Lloyd's Syndicate #2003		5,581		25,380		30,961		6,481	A	A+
General Reinsurance Corporation		703		27,630		28,333		852	A++	AA+
Allied World Reinsurance		6,773		20,291		27,064		2,293	A	A
Munchener Ruckversicherungs-Gesellschaft		858		25,815		26,673		6,614	A+	AA-
Ace Property and Casualty Insurance Company		1,525		22,339		23,864		—	A+	AA-
Platinum Underwriters Re		800		22,186		22,986		2,829	A	A-
White Mountains Reinsurance of America		117		22,544		22,661		96	A	A-
AXIS Re Europe		6,188		15,853		22,041		5,434	A	A+
Tower Insurance Company		8,191		12,980		21,171		1,798	A-	NR
Scor Global P&C SE		10,871		5,911		16,782		6,002	A	A
Lloyd's Syndicate #4000		1,999		13,571		15,570		1,814	A	A+
Validus Reinsurance Ltd.		3,004		12,457		15,461		9,981	A-	A-
Top 20 Total	$	119,138	$	667,519	$	786,657	$	99,714
All Others		45,024		221,717		266,741		77,717
Total	$	164,162	$	889,236	$	1,053,398	$	177,431

(1) — Net of reserve for uncollectible reinsurance of approximately $13.0 million.

(2) — Collateral includes letter of credit, ceded balances payable and other balances held by the Company's Insurance Companies and Lloyd’s Operations.

Summary of Written Premium

The following table summarizes written premium:

		September 30,			September 30,			September 30,
	Year Ended December 31,
In thousands	2011			2010			2009
Direct	$	929,778		$	916,817		$	966,251
Assumed		178,438			70,384			78,667
Ceded		(354,418	)		(333,263	)		(343,663	)
Net	$	753,798		$	653,938		$	701,255

Summary of Earned Premium

The following table summarizes earned premium:

		September 30,			September 30,			September 30,
	Year Ended December 31,
In thousands	2011			2010			2009
Direct	$	912,020		$	925,935		$	977,170
Assumed		125,797			72,643			78,932
Ceded		(346,172	)		(338,647	)		(372,739	)
Net	$	691,645		$	659,931		$	683,363

Summary of Losses and Loss Adjustment Expenses Incurred

The following table summarizes losses and loss adjustment expenses incurred:

		September 30,			September 30,			September 30,
	Year Ended December 31,
In thousands	2011			2010			2009
Direct	$	608,445		$	669,949		$	625,558
Assumed		81,945			32,505			44,318
Ceded		(213,393	)		(281,299	)		(233,878	)
Net	$	476,997		$	421,155		$	435,998