Loss and Loss Adjustment Expense Reserves

3 Months Ended

Mar. 31, 2020

Loss and Loss Adjustment Expense Reserves

Loss and Loss Adjustment Expense Reserves

7.  Loss and Loss Adjustment Expense Reserves

The following table sets forth a reconciliation of beginning and ending reserves for losses and loss adjustment expenses (“LAE”), as shown in the Company’s consolidated financial statements for the periods indicated.

	Three Months Ended March 31,
	2020		2019
Reserves for losses and LAE at beginning of year	$	610,566	$	584,719
Less receivable from reinsurers related to unpaid losses and LAE		(122,372)		(108,398)
Net reserves for losses and LAE at beginning of year		488,194		476,321
Incurred losses and LAE, related to:
Current year		130,330		138,007
Prior years		(9,584)		(11,980)
Total incurred losses and LAE		120,746		126,027
Paid losses and LAE related to:
Current year		48,745		58,796
Prior years		72,839		70,990
Total paid losses and LAE		121,584		129,786
Net reserves for losses and LAE at end of period		487,356		472,562
Plus receivable from reinsurers related to unpaid losses and LAE		121,337		109,200
Reserves for losses and LAE at end of period	$	608,693	$	581,762

At the end of each period, the reserves were re-estimated for all prior accident years. The Company’s prior year reserves decreased by $9,584 and $11,980 for the three months ended March 31, 2020 and 2019, respectively, and resulted from re-estimations of prior years ultimate loss and LAE liabilities. The decreases in prior years reserves during the three months ended March 31, 2020 and 2019 are primarily composed of reductions in our retained automobile and retained homeowners lines reserves.

The Company's automobile lines of business reserves decreased for the three months ended March 31, 2020 and 2019, primarily due to fewer incurred but not yet reported claims than previously estimated and better than previously estimated severity on the Company’s established bodily injury and property damage case reserves. Due to the nature of the risks that the Company underwrites and has historically underwritten, management does not believe that it has an exposure to asbestos or environmental pollution liabilities.