Reinsurance (Tables)

12 Months Ended

Dec. 31, 2013

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 $1.1 billion as of December 31, 2013 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:


		Carrying		Percent
In thousands	Rating	Value ⁽²⁾		of Total ⁽³⁾
A.M. Best Rating description ⁽¹⁾:
Superior	A++, A+	$	536,325		49	%
Excellent	A, A-		525,314		47	%
Very good	B++, B+		12,295		1	%
Fair	B, B-		23,283		2	%
Not rated	NR		11,427		1	%

Total		$	1,108,644		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 $11.3 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, 2013.

(3) -

The Company holds offsetting collateral of approximately 20.2%, including 0.2% for B++, B+ and B companies and 46.7% 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 76.3% of the total recoverable), together with the reinsurance recoverable and collateral as of December 31, 2013, and the reinsurers’ ratings from A.M. Best and S&P:


	Reinsurance Recoverables
	Unearned		Paid/Unpaid				Collateral
In thousands	Premium		Losses		Total ⁽¹⁾		Held ⁽²⁾		A.M. Best	S&P
National Indemnity Company		53,145		87,618		140,763		30,785	A++	AA+
Transatlantic Reinsurance Company		21,411		74,069		95,480		8,506	A	A+
Everest Reinsurance Company		21,581		68,566		90,147		7,704	A+	A+
Munich Reinsurance America Inc.		5,067		70,233		75,300		4,352	A+	AA-
Swiss Reinsurance America Corporation		5,800		68,157		73,957		9,609	A+	AA-
Lloyd’s Syndicate #2003		8,832		43,167		51,999		10,299	A	A+
Allied World Reinsurance		13,859		30,215		44,074		3,971	A	A
Partner Reinsurance Europe		10,962		29,692		40,654		17,027	A+	A+
Scor Global P&C SE		11,710		24,623		36,333		9,895	A	A+
Tower Insurance Company		—		23,283		23,283		—	B	NR
Atlantic Specialty Insurance		9,260		13,602		22,862		3,526	A	A-
Employers Mutual Casualty Company		10,738		10,796		21,534		9,709	A	NR
Validus Reinsurance Ltd.		2,403		17,308		19,711		14,501	A	A
Lloyd’s Syndicate #4000		147		19,432		19,579		407	A	A+
QBE Reinsurance Corp		7,131		11,292		18,423		1,781	A	A+
Ace Property and Casualty Insurance Company		9,862		7,687		17,549		7,342	A+	AA-
Odyssey American Reinsurance Corporation		3,550		11,997		15,547		2,175	A	A-
Berkley Insurance Company		1,983		13,439		15,422		485	A+	A+
Ironshore Indemnity Inc.		6,808		7,980		14,788		7,959	A	NR
AXIS Re Europe		4,762		9,347		14,109		3,675	A+	A+

Top 20 Reinsurers		209,011		642,503		851,514		153,708
Others		38,811		218,319		257,130		69,769

Total		247,822		860,822		1,108,644		223,477

(1) -

Net of reserve for uncollectible reinsurance of approximately $11.3 million.

(2) -

Collateral of $223.5 million consists of $167.3 million in ceded balances payable, $53.4 million in letters of credit, and $2.8 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	2013			2012			2011
Direct	$	1,127,331		$	1,034,658		$	929,778
Assumed		243,187			251,807			178,438
Ceded		(482,596	)		(452,810	)		(354,418	)

Net	$	887,922		$	833,655		$	753,798

Summary of Earned Premium

The following table summarizes earned premium:


	Year Ended December 31,
In thousands	2013			2012			2011
Direct	$	1,069,677		$	972,844		$	912,020
Assumed		228,247			205,759			125,797
Ceded		(455,985	)		(396,639	)		(346,172	)

Net	$	841,939		$	781,964		$	691,645

Summary of Losses and Loss Adjustment Expenses Incurred

The following table summarizes losses and loss adjustment expenses incurred:


	Year Ended December 31,
In thousands	2013			2012			2011
Direct	$	552,381		$	608,945		$	608,445
Assumed		155,313			151,137			81,945
Ceded		(188,733	)		(262,649	)		(213,393	)

Net	$	518,961		$	497,433		$	476,997