Company: KG
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001628280-25-049606
Chunk: 52

Company: Kestrel Group Ltd
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 52
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 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(in thousands of U.S. dollars, except share and per share data)

8. Reinsurance 

The Company uses reinsurance and retrocessional agreements ("ceded reinsurance") to mitigate volatility, reduce its exposure to certain risks and provide capital support. Ceded reinsurance provides for the recovery of a portion of loss and LAE under certain circumstances without relieving the Company of its obligations to the policyholders. The Company remains liable to the extent that any of its reinsurers or retrocessionaires fails to meet their obligations. Loss and LAE incurred and premiums earned are reported after deduction for ceded reinsurance. In the event that one or more of our reinsurers or retrocessionaires are unable to meet their obligations under these agreements, the Company would not realize the full value of the reinsurance recoverable balances.The effect of ceded reinsurance on net premiums written and earned and on net loss and LAE for the nine months ended September 30, 2025 was as follows: For the Nine Months Ended September 30,2025Premiums writtenDirect$4,950 Assumed(94)Ceded134 Net$4,990 Premiums earnedDirect$5,283 Assumed3,880 Ceded95 Net$9,258 Loss and LAEGross loss and LAE$1,867 Loss and LAE ceded2,578 Net$4,445 The Company's reinsurance recoverable on unpaid losses balance as at September 30, 2025 was $492,790 presented in the Condensed Consolidated Balance Sheets. As of September 30, 2025, the total allowance for expected credit losses on the Company's reinsurance recoverable balance was $1,459. The following table provides a reconciliation of the beginning and ending balances of the allowance for expected credit losses on reinsurance recoverable for the three and nine months ended September 30, 2025:For the Three Months Ended September 30,For the Nine Months Ended September 30, 20252025Allowance for expected credit losses on reinsurance recoverable, beginning of period$1,655 $— Expected credit losses on recoverables where credit losses were not previously recognized— 1,655 Decrease in allowance for expected credit losses on reinsurance recoverable where credit losses were previously recognized(196)(196)Allowance for expected credit losses on reinsurance