Reinsurance

9 Months Ended

Sep. 30, 2020

Retrocession Arrangements And Reinsurance Ceded Receivables [Abstract]

Retrocession Arrangements and Reinsurance Ceded Receivables

Reinsurance

Retrocession reinsurance treaties do not relieve the Company from its obligations to direct writing companies. Failure of retrocessionaires to honor their obligations could result in losses to the Company. Consequently, allowances would be established for amounts deemed uncollectible. At September 30, 2020 and December 31, 2019, no allowances were deemed necessary. The Company regularly evaluates the financial condition of the insurance companies from which it assumes and to which it cedes reinsurance.

Retrocessions are arranged through the Company’s retrocession pools for amounts in excess of the Company’s retention limit. As of September 30, 2020 and December 31, 2019, all rated retrocession pool participants followed by the A.M. Best Company were rated “A- (excellent)” or better. The Company verifies retrocession pool participants’ ratings on a quarterly basis. For a majority of the retrocessionaires that were not rated, security in the form of letters of credit or trust assets has been posted. In addition, the Company performs annual financial reviews of its retrocessionaires to evaluate financial stability and performance.

The following table presents information for the Company’s reinsurance ceded receivable assets, including the respective amount and A.M. Best rating for each reinsurer representing in excess of five percent of the total as of September 30, 2020 or December 31, 2019 (dollars in millions):

		September 30, 2020				December 31, 2019
Reinsurer	A.M. Best Rating	Amount		% of Total		Amount		% of Total
Reinsurer A	A+	$	403	42.4	%	$	367	40.6	%
Reinsurer B	A+	207		21.8		208		23.0
Reinsurer C	A	63		6.6		84		9.3
Reinsurer D	A++	53		5.6		53		5.9
Reinsurer E	A+	46		4.8		43		4.8
Other reinsurers		178		18.8		149		16.4
Total		$	950	100.0	%	$	904	100.0	%

Included in the total reinsurance ceded receivables balance were $262 million and $223 million of claims recoverable, of which $16 million and $15 million were in excess of 90 days past due, as of September 30, 2020 and December 31, 2019, respectively.