Reinsurance

3 Months Ended

Mar. 31, 2025

8.	Reinsurance

In order to limit the Company’s potential exposure to individual risks and catastrophic events, the Company purchases reinsurance from third-party reinsurers as well as the Florida Hurricane Catastrophe Fund, a state-mandated catastrophe fund for Florida policies only. Most of the Company’s reinsurance partners were rated “A-” or higher by A.M. Best Company, Inc. (“A.M. Best”) or “BBB” or higher by Standard & Poor’s Financial Services LLC (“S&P”) or were fully collateralized.

In 2024, the Company also began participating in a

“take-out

program” through which the Company assumes insurance policies held by Citizens Property Insurance Corporation (“Citizens”), a Florida state-supported insurer. The

take-out

program is a legislatively mandated program designed to reduce the state’s risk exposure by encouraging private companies to assume policies from Citizens.

The Company remains contingently liable in the event the reinsuring companies do not meet their obligations under these reinsurance contracts. Given the quality of the reinsuring companies, management believes this possibility to be remote.

Effect of Reinsurance

The effects of reinsurance on premiums written and earned are as follows:


	Three Months Ended March 31,
	2025						2024
	Written			Earned			Written			Earned
Direct premiums	$	180,925		$	166,771		$	147,452		$	156,928
Assumed Premiums		31,225			43,385			—			—
Gross Premiums		212,150			210,156			147,452			156,928
Ceded premiums		(58,754	)		(144,754	)		(40,987	)		(117,645	)

Net premiums	$	153,396		$	65,402		$	106,465		$	39,283

The Company’s reinsurance arrangements affected certain items in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2025 and 2024 by the following amounts:


	Three Months Ended March 31,
	2025			2024
Ceded premiums earned	$	(144,754	)	$	(117,645	)
Ceded losses and loss adjustment expenses incurred		20,862			20,365
Ceded policy acquisition expenses		38,693			26,865

For the three months ended March 31, 2025 and 2024, recoveries received under reinsurance contracts were $36,285 and $72,260 respectively.