Reinsurance (Tables)

12 Months Ended

Dec. 31, 2012

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 the Company’s reinsurance recoverables of $1.15 billion as of December 31, 2012 for ceded paid and unpaid losses and LAE and ceded unearned premiums based on insurer financial strength ratings from A.M. Best or S&P were as follows:

In thousands	Rating	Carrying Value  (2)		Percent of Total (3)
A.M. Best Rating description (1):
Superior	A++, A+	$	567,903		49	%
Excellent	A, A-		568,630		50	%
Very good	B++, B+		67		0	%
Not rated	NR		13,836		1	%
Total		$	1,150,436		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 $11.5 million. The carrying 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, 2012.

(3) — The Company holds offsetting collateral of approximately 19.7%, including 17.6% for B++ and B+ companies and 54.4% from non 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 the Company’s 20 largest reinsurers measured by the amount of reinsurance recoverable for ceded losses and LAE and ceded unearned premium (constituting 72.7% of the total recoverable), together with the reinsurance recoverable and collateral as of December 31, 2012, and the reinsurers’ ratings from AMB or S&P:

	Reinsurance Recoverables
In thousands	Unearned Premium		Paid/Unpaid Losses		Total (1)		Collateral Held (2)		AMB	S&P
National Indemnity Company	$	41,004	$	58,215	$	99,219	$	27,976	A++	AA+
Swiss Reinsurance America Corporation		4,708		89,842		94,550		9,916	A+	AA-
Munich Reinsurance America Inc.		10,005		81,982		91,987		5,356	A+	AA-
Transatlantic Reinsurance Company		17,763		73,221		90,984		8,219	A	A+
Everest Reinsurance Company		19,098		70,097		89,195		8,003	A+	A+
Lloyd’s Syndicate #2003		7,946		38,757		46,703		10,909	A	A+
Partner Reinsurance Europe		9,811		34,859		44,670		17,168	A+	A+
Allied World Reinsurance		10,017		24,749		34,766		3,577	A	A
Scor Global P&C SE		12,521		21,505		34,026		7,139	A	A+
General Reinsurance Corporation		468		27,134		27,602		789	A++	AA+
Tower Insurance Company		11,363		15,271		26,634		7,195	A-	NR
Validus Reinsurance Ltd.		2,719		22,357		25,076		13,830	A	A
Berkley Insurance Company		1,675		19,402		21,077		88	A+	A+
Scor Holding (Switzerland) AG		877		16,139		17,016		9,080	A	A+
Ace Property and Casualty Insurance Company		867		15,979		16,846		—	A+	AA-
AXIS Re Europe		3,084		12,566		15,650		2,530	A	A+
Sirius America Insurance Company		59		15,457		15,516		21	A	A-
Platinum Underwriters Re		405		14,653		15,058		1,594	A	A-
Lloyd’s Syndicate #4000		2,407		12,323		14,730		1,772	A	A+
Star Insurance Company		7,812		6,830		14,642		2,837	A-	BBB
Top 20 Total	$	164,609	$	671,338	$	835,947	$	137,999
All Others		56,406		258,083		314,489		89,166
Total	$	221,015	$	929,421	$	1,150,436	$	227,165

(1) — Net of reserve for uncollectible reinsurance of approximately $11.5 million.

(2) — Collateral of $227.2 million consists of $165.8 million in ceded balances payable, $57.2 million in letters of credit, and $4.2 million of other balances held by the Company’s Insurance Companies and Lloyd’s Operations.

Summary of Written Premium

The following table summarizes written premium:

	Year Ended December 31,
In thousands	2012			2011			2010
Direct	$	1,034,658		$	929,778		$	916,817
Assumed		251,807			178,438			70,384
Ceded		(452,810	)		(354,418	)		(333,263	)
Net	$	833,655		$	753,798		$	653,938

Summary of Earned Premium

The following table summarizes earned premium:

	Year Ended December 31,
In thousands	2012			2011			2010
Direct	$	972,844		$	912,020		$	925,935
Assumed		205,759			125,797			72,643
Ceded		(396,639	)		(346,172	)		(338,647	)
Net	$	781,964		$	691,645		$	659,931

Summary of Losses and Loss Adjustment Expenses Incurred

The following table summarizes losses and loss adjustment expenses incurred:

	Year Ended December 31,
In thousands	2012			2011			2010
Direct	$	608,945		$	608,445		$	669,949
Assumed		151,137			81,945			32,505
Ceded		(262,649	)		(213,393	)		(281,299	)
Net	$	497,433		$	476,997		$	421,155