Company: AIZ
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001267238-25-000008
Chunk: 106

Company: ASSURANT, INC.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 7
Chunk 106
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able from reinsurers are estimated in a manner consistent with claim and claim adjustment expense reserves or future policy benefits reserves. Reinsurance recoverables include amounts we are owed by reinsurers for claims paid as well as those included in reserve estimates that are subject to the reinsurance. 

We use a probability of default and loss given default methodology in estimating an expected credit loss allowance, whereby the credit ratings of reinsurers are used in determining the probability of default. The allowance is established for reinsurance recoverables on paid and unpaid future policy benefits and claims and benefits. Prior to applying default factors, the net exposure to credit risk is reduced for any collateral for which the right of offset exists, such as funds withheld, assets held in trust and letters of credit, which are part of the reinsurance arrangements, with adjustments to include consideration of credit exposure on the collateral. Our methodology incorporates historical default factors for each reinsurer based on their credit rating using comparably rated bonds as published by a major ratings service. The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing and other relevant factors. 

In the ordinary course of business, we are involved in both the assumption and cession of reinsurance with non-affiliated companies. The following table provides details of the reinsurance recoverables balance as of December 31, 2024 and 2023:

20242023Ceded future policyholder benefits and expense$340.7 $339.9 Ceded unearned premium5,188.5 5,265.2 Ceded claims and benefits payable1,808.9 971.4 Ceded paid losses241.4 72.7 Total$7,579.5 $6,649.2 

For additional information regarding our reserves and reinsurance recoverables, see Notes 2, 4, 16 and 17 to the Consolidated Financial Statements included elsewhere in this Report.

Short Duration Contracts 

Claims and benefits payable reserves for short duration contracts include (1) case reserves for known claims which are unpaid as of the balance sheet date; (2) IBNR reserves for claims where the insured event has occurred but has not been 

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reported to us as of the balance sheet date; and (3) loss adjustment expense reserves for the expected handling costs of settling the claims. Periodically, we review emerging experience and make adjustments to our reserves and assumptions where necessary. 

Ultimate loss and loss adjustment expenses are estimated