Reserve for Losses and Loss Adjustment Expenses (Tables)

6 Months Ended

Jun. 30, 2021

Schedule of Reserve for Losses and Loss Adjustment Expenses

Activity in the reserve for losses and loss adjustment expenses is summarized as follows:


(In thousands)	Six Months Ended June 30, 2021		Six Months Ended June 30, 2020		Year Ended December 31, 2020
Balance, beginning of year	$	2,417,179	$	2,346,526	$	2,346,526
Less reinsurance recoverables on unpaid losses and loss adjustment expenses	385,087		390,708		390,708
Net balance, beginning of year	2,032,092		1,955,818		1,955,818
Net reserves acquired from NORCAL acquisition	1,089,103		—		—
Net losses:
Current year(1)(2)(3)	350,252		398,923		711,846
Favorable development of reserves established in prior years, net	(18,616)		(23,092)		(50,399)
Total	331,636		375,831		661,447
Paid related to:
Current year	(32,346)		(32,283)		(83,204)
Prior years	(282,713)		(296,461)		(501,969)
Total paid	(315,059)		(328,744)		(585,173)
Net balance, end of period	3,137,772		2,002,905		2,032,092
Plus reinsurance recoverables on unpaid losses and loss adjustment expenses	484,059		386,276		385,087
Balance, end of period	$	3,621,831	$	2,389,181	$	2,417,179

(1) Current year net losses for the six months ended June 30, 2021 included $1.8 million of amortization of the negative VOBA associated with NORCAL's assumed unearned premium, which is being amortized over a period in proportion to the earn-out of the associated premium as a reduction to current accident year net losses (see Note 2). Additionally, current year net losses for the six months ended June 30, 2021 included $5.1 million related to a Custom Physician tail policy in the Specialty P&C segment.

(2) Current year net losses for the six months ended June 30, 2021 included incurred losses of $2.9 million related to an assumed reinsurance arrangement entered into during the first quarter of 2021 in the Specialty P&C segment (see Note 5).

(3) Current year net losses for the six months ended June 30, 2020 and the year ended December 31, 2020 included the impact of a large national healthcare account in the Specialty P&C segment including losses of $60.0 million associated with a tail policy and $9.2 million of amortization of a related PDR. For additional information, see Note 7 of the Notes to Consolidated Financial Statements included in ProAssurance's December 31, 2020 report on Form 10-K.