Reinsurance

12 Months Ended

Dec. 31, 2025

12. Reinsurance

In reinsurance and retrocession transactions, an insurance or reinsurance company transfers, or cedes, all or part of its exposure in return for a premium. The ceding of insurance does not legally discharge the Company from its primary liability for the full amount of the policies, and the Company will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance or retrocessional agreement. A credit risk exists with ceded reinsurance to the extent that any reinsurer is unable to meet the obligations assumed under the reinsurance or retrocessional contracts. Allowances are established for credit losses expected to be recognized over the life of the reinsurance recoverables.

Underwriting

Within its underwriting operations, the Company uses reinsurance and retrocessional reinsurance to manage its net retention on individual risks and overall exposure to losses while providing it with the ability to offer policies with sufficient limits to meet policyholder needs.

Within the Company's underwriting operations, at December 31, 2025, balances recoverable from the ten largest reinsurers, by group, represented 63% of the $5.8 billion reinsurance recoverables before considering reinsurance allowances and collateral. As of December 31, 2024, balances recoverable from the ten largest reinsurers, by group, represented 63% of the $5.0 billion reinsurance recoverables before considering reinsurance allowances and collateral. At December 31, 2025, the largest reinsurance balance was due from RenaissanceRe and represented 21% of reinsurance recoverables before considering reinsurance allowances and collateral.

Fronting

Within its fronting operations, the Company generally enters into quota share reinsurance agreements whereby the Company cedes to the capacity providers (reinsurers) substantially all of its gross liability under the policies issued by the Company. However, there are certain programs that contain limits on the reinsurers' obligations to the Company that expose the Company to underwriting risk, including loss ratio caps, exclusions of the credit risk of producers, and aggregate reinsurance limits that the Company believes are unlikely to be exceeded. The Company also remains exposed to the credit risk of the reinsurer, or the risk that one of its reinsurers becomes insolvent or otherwise unable or unwilling to pay policyholder claims. This credit risk is generally mitigated by either selecting well capitalized, highly rated authorized capacity providers or requiring that the capacity provider post substantial collateral to secure the reinsured risks, which, in some instances, exceeds the related reinsurance recoverable.

Within the Company's program services operations, at December 31, 2025, balances recoverable from the ten largest reinsurers, by group, represented 63% of the $8.8 billion reinsurance recoverables before considering reinsurance allowances

and collateral. As of December 31, 2024, balances recoverable from the ten largest reinsurers, by group, represented 55% of the $6.0 billion reinsurance recoverables before considering reinsurance allowances and collateral. At December 31, 2025, the largest reinsurance balance was due from Longtail Re and represented 26% of reinsurance recoverables before considering reinsurance allowances and collateral. The reinsurance balance due from Longtail Re, as of December 31, 2025, was fully collateralized.

All of the other business fronted by the Company is on behalf of Nephila; therefore, substantially all of the reinsurance recoverables within these operations are attributable to unconsolidated entities managed by Nephila, which are considered related parties. See note 18.

The following tables summarize the effect of reinsurance and retrocessional reinsurance on premiums written and earned. Fronting premiums are attributable to business written on behalf of third-party capacity providers, substantially all of which are ceded.


	Year Ended December 31, 2025
(dollars in thousands)	Direct		Assumed		Ceded		Net Premiums
Underwriting:
Written	$	9,290,639	$	1,670,815	$	(2,243,961)	$	8,717,493
Earned	$	9,049,301	$	1,768,441	$	(2,102,467)	$	8,715,275
Fronting:
Written	3,022,177		2,539,806		(5,561,647)		336
Earned	3,287,788		2,292,526		(5,579,922)		392
Consolidated:
Written	$	12,312,816	$	4,210,621	$	(7,805,608)	$	8,717,829
Earned	$	12,337,089	$	4,060,967	$	(7,682,389)	$	8,715,667


	Year Ended December 31, 2024
(dollars in thousands)	Direct		Assumed		Ceded		Net Premiums
Underwriting:
Written	$	8,860,015	$	1,691,858	$	(2,252,122)	$	8,299,751
Earned	$	8,801,477	$	1,628,408	$	(1,993,895)	$	8,435,990
Fronting:
Written	3,234,025		1,708,733		(4,946,334)		(3,576)
Earned	3,053,947		1,559,599		(4,617,124)		(3,578)
Consolidated:
Written	$	12,094,040	$	3,400,591	$	(7,198,456)	$	8,296,175
Earned	$	11,855,424	$	3,188,007	$	(6,611,019)	$	8,432,412


	Year Ended December 31, 2023
(dollars in thousands)	Direct		Assumed		Ceded		Net Premiums
Underwriting:
Written	$	8,657,266	$	1,620,366	$	(1,878,844)	$	8,398,788
Earned	$	8,363,710	$	1,616,630	$	(1,683,648)	$	8,296,692
Fronting:
Written	2,649,217		1,075,388		(3,725,818)		(1,213)
Earned	2,636,179		937,400		(3,574,792)		(1,213)
Consolidated:
Written	$	11,306,483	$	2,695,754	$	(5,604,662)	$	8,397,575
Earned	$	10,999,889	$	2,554,030	$	(5,258,440)	$	8,295,479


	Year Ended December 31,
	2025		2024		2023
Ceded earned premiums to gross earned premiums	47	%	44	%	39	%
Assumed earned premiums to net earned premiums	47	%	38	%	31	%

Substantially all of the incurred losses and loss adjustment expenses related to the Company's fronted premiums were ceded. These gross losses totaled $4.1 billion, $3.5 billion, and $2.5 billion for the years ended December 31, 2025, 2024, and 2023 respectively.

The following table summarizes the effect of reinsurance and retrocessional reinsurance on losses and loss adjustment expenses in the Company's underwriting operations.


	Year Ended December 31,
(dollars in thousands)	2025		2024		2023
Gross losses and loss adjustment expenses	$	6,812,815	$	6,970,871	$	6,817,630
Ceded losses and loss adjustment expenses	(1,731,136)		(1,917,318)		(1,496,265)
Net losses and loss adjustment expenses	$	5,081,679	$	5,053,553	$	5,321,365

MARKEL GROUP INC. 10-K