v3.25.2
Reinsurance
6 Months Ended
Jun. 30, 2025
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract]  
Reinsurance Reinsurance
We reinsure a portion of our policy risks to third parties in order to reduce our ultimate losses, diversify our exposures and comply with regulatory requirements. We also assume certain policy risks written by other companies.
Reinsurance does not relieve us from our obligations to policyholders. In the event that the reinsurers are unable to meet their obligations, we remain liable for the reinsured claims. We monitor both the financial condition of individual reinsurers and risk concentrations arising from similar geographic regions, activities and economic characteristics of reinsurers to lessen the risk of default by such reinsurers.
The following table sets forth the effects of reinsurance on premiums written and earned for the periods indicated:
Three months ended
June 30,
Six months ended
June 30,
(Amounts in thousands)
2025202420252024
Net premiums written:
Direct$262,925 $259,265 $526,006 $514,425 
Assumed8,131 3,460 15,436 5,031 
Ceded(32,082)(27,175)(64,843)(53,603)
Net premiums written$238,974 $235,550 $476,599 $465,853 
Net premiums earned:
Direct$269,240 $268,282 $539,482 $533,886 
Assumed8,131 3,460 15,436 5,031 
Ceded(32,082)(27,175)(64,843)(53,603)
Net premiums earned$245,289 $244,567 $490,075 $485,314 
The difference between written premiums of $239.0 million and earned premiums of $245.3 million represents the decrease in unearned premiums for the three months ended June 30, 2025. The difference between written premiums of $476.6 million and earned premiums of $490.1 million represents the decrease in unearned premiums for the six months ended June 30, 2025. The decrease in unearned premiums in both periods was primarily the result of premiums earned over time coupled with low originations of our single premium mortgage insurance product.
Excess-of-loss reinsurance
We engage in excess-of-loss (“XOL”) insurance transactions either through a panel of traditional reinsurance providers or through collateralized reinsurance with unaffiliated special purpose insurers (“Triangle Re Entities”). During the respective coverage periods of these agreements, EMICO retains the first layer of aggregate loss exposure on covered policies while the reinsurer provides the second layer of coverage, up to the defined reinsurance coverage amount. EMICO retains losses in excess of the respective reinsurance coverage amount.
The Triangle Re Entities fully collateralize their coverage by issuing insurance-linked notes (“ILNs”) to eligible capital market investors in unregistered private offerings. Traditional reinsurance providers collateralize a portion of their coverage by holding funds in trust. We believe that the risk transfer requirements for reinsurance accounting were met as these XOL insurance transactions assume significant insurance risk and a reasonable possibility of significant loss.
EMICO has rights to terminate the ILNs or traditional XOL reinsurance agreements upon the occurrence of certain events.
The following table presents the issue date, policy dates, initial and current first layer retained aggregate loss and initial and current reinsurance coverage amount under each reinsurance transaction. Current amounts are presented as of June 30, 2025:
Mortgage insurance-linked notes
(Amounts in millions)Issue datePolicy datesInitial first layer retained lossCurrent first layer retained lossInitial reinsurance coverageCurrent reinsurance coverage
Triangle Re 2021-2 Ltd.4/16/20219/01/2020 - 12/31/2020$189$187$303$94
Triangle Re 2021-3 Ltd.9/02/20211/01/2021 - 6/30/2021$304$300$372$140
Triangle Re 2023-1 Ltd.11/15/20237/01/2022 - 6/30/2023$244$242$248$206
Total$440
Traditional excess-of-loss reinsurance
(Amounts in millions)Issue datePolicy datesInitial first layer retained lossCurrent first layer retained lossInitial reinsurance coverageCurrent reinsurance coverage
2021 XOL2/04/20211/01/2021 - 12/31/2021$671$661$206$72
2022-1 XOL1/27/20221/01/2022 - 12/31/2022$462$446$196$148
2022-2 XOL1/27/20221/01/2022 - 12/31/2022$385$369$25$25
2022-3 XOL3/24/20227/01/2021 - 12/31/2021$317$311$289$142
2022-4 XOL3/24/20227/01/2021 - 12/31/2021$264$258$36$36
2022-5 XOL 9/15/20221/01/2022 - 6/30/2022$256$247$201$140
2023-1 XOL3/08/20231/01/2023 - 12/31/2023$360$356$180$172
2024-1 XOL1/30/20241/01/2024 - 12/31/2024$362$362$270$270
2024-2 XOL6/25/20247/01/2023 - 12/31/2023$134$134$90$87
2025-1 XOL1/27/20251/01/2025 - 12/31/2025$161$161$75$75
2025-2 XOL1/27/20251/01/2025 - 12/31/2025$134$134$11$11
Total$1,178
On January 27, 2025, we entered into an excess-of-loss reinsurance transaction that covers a portion of expected new insurance written from January 1, 2026, through December 31, 2026, and provides reinsurance coverage of approximately $260 million.
Quota Share Reinsurance
EMICO engages in quota share reinsurance agreements with a panel of third-party reinsurers. Under the agreements, we cede a percentage of premiums earned, claims and claims expenses on eligible policies. The agreements also include a specific ceding commission and profit commission determined based on ceded claims. EMICO has rights to terminate the reinsurance agreements upon the occurrence of certain events. Reinsurance recoverables are recorded in Other assets on the consolidated balance sheets.
AgreementIssue datePolicy datesCeding percentageCeding commissionProfit commission
QS 2023-16/30/20231/01/2023 - 12/31/202316.125%20%
up to 55%
QS 2024-11/03/20241/01/2024 - 12/31/202421.225%20%
up to 55%
QS 2025-111/26/20241/01/2025 - 12/31/202527.150%20%
up to 62%
QS 2026-111/26/20241/01/2026 - 12/31/202627.000%20%
up to 61%