Reinsurance

6 Months Ended

Jun. 30, 2026

The Company purchases reinsurance and other protection to manage its risk portfolio and to reduce its exposure to large losses. The Company currently has in place contracts that provide for recovery of a portion of certain loss and loss adjustment expenses, generally in excess of various retentions or on a proportional basis. Amounts recoverable under reinsurance contracts are recorded as assets. The Company remains liable to the extent that any reinsurance company fails to meet its obligations.

Allowance for Expected Credit Losses

Premiums receivable, paid losses recoverable, and unpaid losses and loss adjustment expenses recoverable comprise the Company's most significant credit exposures not carried at fair value. The Company has not historically experienced significant credit losses. In determining an allowance for these assets, the Company considers historical information in combination with counterparty financial strength ratings and the extent to which balances are collateralized. The Company assesses the risk of future default by evaluating current market conditions for the likelihood of default and calculates its provision for current expected credit losses under the probability of default and loss given default methodology.

Premiums Receivable

Premiums receivable are estimated based on policy terms and reports received from the underlying counterparties, supplemented by management's judgment. Due to the nature of the (re)insurance business, the Company routinely receives reports and premiums subsequent to the inception of the coverage period. At June 30, 2026, the Company’s premiums receivable balance, net of credit provisions of $3.7 million, was $1.2 billion. At December 31, 2025, the Company’s premiums receivable balance, net of credit provisions of $3.4 million, was $939.8 million.

The following table provides a roll forward of the provision for current expected credit losses of the Company's premiums receivable:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands)	2026		2025		2026		2025
Beginning balance	$	3,754	$	1,808	$	3,443	$	2,993
Increase (decrease) in allowance	(90)		33		221		(1,152)
Ending balance	$	3,664	$	1,841	$	3,664	$	1,841

Reinsurance Balances Recoverable

Reinsurance balances recoverable is comprised of amounts due from reinsurers based on the claim liabilities associated with the reinsured policy. The Company accrues amounts due from reinsurers based on estimated ultimate contract losses. At June 30, 2026, the Company’s paid and unpaid reinsurance recoverable balances net of credit provisions were $99.2 million and $1.5 billion, respectively, with a total corresponding provision for current expected credit losses of $1.4 million. At December 31, 2025, the Company’s paid and unpaid reinsurance recoverable balances net of credit provisions were $93.7 million and $1.4 billion, respectively, with a total corresponding provision for current expected credit losses of $1.7 million.

The following table provides a roll forward of the provision for current expected credit losses of the Company's reinsurance recoverable:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands)	2026		2025		2026		2025
Beginning balance	$	1,853	$	1,121	$	1,718	$	1,469
Increase (decrease) in allowance	(450)		248		(315)		(100)
Ending balance	$	1,403	$	1,369	$	1,403	$	1,369

The distribution of the Company’s paid losses recoverable and unpaid losses and loss adjustment expenses recoverable as categorized by major rating agencies were as follows:



Classification	June 30, 2026		December 31, 2025
Collateralized	20.4	%	20.7	%
A- or better	79.3	%	79.3	%
Below A-	0.3	%	0.0	%
Total	100.0	%	100.0	%

At June 30, 2026 and December 31, 2025, the three largest balances by reinsurer accounted for 21%, 16% and 12%, and 20%, 18% and 12%, respectively, of paid losses recoverable and unpaid losses and loss adjustment expenses recoverable.

Loss Portfolio Transfer

On February 6, 2020, the Company entered into a loss portfolio transfer agreement (the "LPT"), under which the insurance liabilities arising from certain casualty risks for the Lloyd's Years of Account ("YOA") 2016, 2017 and 2018 were retroceded to a third party in exchange for total premium of $72.1 million. This transaction was accounted for as retroactive reinsurance under which cumulative ceded losses exceeding the LPT premium are recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves in proportion to cumulative losses collected over the estimated ultimate reinsurance recoverable. The amount of the deferred gain is recalculated each reporting period based on updated ultimate loss estimates. Consequently, cumulative adverse development subsequent to the signing of the LPT may result in significant losses from operations until periods when the recalculated deferred gain is recognized as a benefit to earnings.

At June 30, 2026 and December 31, 2025, the balance of reinsurance recoverable on unpaid losses due under this LPT was $23.5 million and $22.7 million, respectively. Amortization of the deferred gain was income of $2.4 million and an expense of $2.2 million during the three months ended June 30, 2026 and 2025, respectively, and income of $2.6 million and an expense of $2.7 million during the six months ended June 30, 2026 and 2025, respectively, which was recorded through losses and loss adjustment expenses in accordance with the actual loss payments and updated estimates of ultimate losses of the subject business.

Catastrophe Bond Reinsurance

In December 2023, Hamilton Group sponsored an industry loss index-triggered catastrophe bond through the issuance of Series 2024-1 Class A Principal-at-Risk Variable Rate Notes by Bermuda domiciled Easton Re Ltd. ("Easton Re"), which provide the Company's operating platforms with multi-year risk transfer capacity of $200 million to protect against named storm risk in the United States and earthquake risk in the United States and Canada. The risk period for Easton Re is from January 1, 2024 to December 31, 2026. The Company recorded reinsurance premiums ceded of $Nil for each of the three months ended June 30, 2026 and 2025. The Company recorded reinsurance premiums ceded of $15.9 million and $15.2 million for the six months ended June 30, 2026 and 2025, respectively.