Loss and Loss Adjustment Expense Reserves

3 Months Ended

Mar. 31, 2022

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,
	2022		2021
Reserves for losses and LAE at beginning of year	$	570,651	$	567,581
Less receivable from reinsurers related to unpaid losses and LAE		(90,667)		(106,311)
Net reserves for losses and LAE at beginning of year		479,984		461,270
Incurred losses and LAE, related to:
Current year		135,578		123,954
Prior years		(12,412)		(12,459)
Total incurred losses and LAE		123,166		111,495
Paid losses and LAE related to:
Current year		57,650		48,084
Prior years		76,135		55,593
Total paid losses and LAE		133,785		103,677
Net reserves for losses and LAE at end of period		469,365		469,088
Plus receivable from reinsurers related to unpaid losses and LAE		90,656		108,178
Reserves for losses and LAE at end of period	$	560,021	$	577,266

At the end of each period, the reserves were re-estimated for all prior accident years. The Company’s prior year reserves decreased by $12,412 and $12,459 for the three months ended March 31, 2022 and 2021, 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, 2022 and 2021 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, 2022 and 2021, 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.