Loss and Loss Adjustment Expense Reserves

6 Months Ended

Jun. 30, 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 LAE, as shown in the Company’s consolidated financial statements for the periods indicated.

	Six Months Ended June 30,
	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		265,154		247,464
Prior years		(29,273)		(25,808)
Total incurred losses and LAE		235,881		221,656
Paid losses and LAE related to:
Current year		141,809		120,115
Prior years		114,449		86,967
Total paid losses and LAE		256,258		207,082
Net reserves for losses and LAE at end of period		459,607		475,844
Plus receivable from reinsurers related to unpaid losses and LAE		88,538		101,107
Reserves for losses and LAE at end of period	$	548,145	$	576,951

At the end of each period, the reserves were re-estimated for all prior accident years. The Company’s prior year reserves decreased by $29,273 and $25,808 for the six months ended June 30, 2022 and 2021, respectively, and resulted from re-estimations of prior year’s ultimate loss and LAE liabilities. The decreases in prior years reserves during the six months ended June 30, 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 six months ended June 30, 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.