Unpaid Losses and Loss Adjustment Expenses

3 Months Ended

Mar. 31, 2021

Unpaid Losses And Loss Adjustment Expenses

Unpaid Losses and Loss Adjustment Expenses

The following table provides an analysis of Crusader’s loss and loss adjustment expense reserves, including a reconciliation of the beginning and ending balance sheet liability for the periods indicated: 

	Three Months Ended March 31
	2021			2020
Reserve for unpaid losses and loss adjustment expenses   at January 1 – gross of reinsurance	$	74,893,509		$	55,066,480
Less reinsurance recoverable on unpaid losses and loss      adjustment expenses		22,253,642			14,725,855
Reserve for unpaid losses and loss adjustment expenses   at January 1 – net of reinsurance		52,639,867			40,340,625
Incurred losses and loss adjustment expenses:
Provision for insured events of current year		6,757,564			5,161,176
Development of insured events of prior years		(1,172,351	)		716,209
Total incurred losses and loss adjustment expenses		5,585,213			5,877,385
Loss and loss adjustment expense payments:
Attributable to insured events of the current year		2,545,181			1,444,009
Attributable to insured events of prior years		3,410,932			4,034,155
Total payments		5,956,113			5,478,164
Reserve for unpaid losses and loss adjustment expenses      at March 31 – net of reinsurance		52,268,967			40,739,846
Reinsurance recoverable on unpaid losses and loss      adjustment expenses		22,133,366			15,399,752
Reserve for unpaid losses and loss adjustment expenses at      March 31 – gross of reinsurance	$	74,402,333		$	56,139,598

Some lines of insurance are commonly referred to as "long-tail" lines because of the extended time required before claims are ultimately settled. Lines of insurance in which claims are settled relatively quickly are called "short-tail" lines. It is generally more difficult to estimate loss reserves for long-tail lines because of the long period of time that elapses between the occurrence of a claim and its final disposition and the difficulty of estimating the settlement value of the claim. Crusader’s short-tail lines consist of its property coverages, and its long-tail lines consist of its liability coverages. However, Crusader’s long-tail liability claims tend to be settled relatively quicker than other long-tail lines not underwritten by Crusader, such as workers’ compensation, professional liability, umbrella liability, and medical malpractice.