Loss and Loss Adjustment Expense Reserves

9 Months Ended

Sep. 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.

	Nine Months Ended September 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		403,173		381,996
Prior years		(43,223)		(41,211)
Total incurred losses and LAE		359,950		340,785
Paid losses and LAE related to:
Current year		236,571		211,048
Prior years		149,977		111,708
Total paid losses and LAE		386,548		322,756
Net reserves for losses and LAE at end of period		453,386		479,299
Plus receivable from reinsurers related to unpaid losses and LAE		92,026		99,248
Reserves for losses and LAE at end of period	$	545,412	$	578,547

At the end of each period, the reserves were re-estimated for all prior accident years. The Company’s prior year reserves decreased by $43,223 and $41,211 for the nine months ended September 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 nine months ended September 30, 2022 and 2021, are primarily composed of reductions in our automobile and retained homeowners lines reserves.

The Company's automobile lines of business reserves decreased for the nine months ended September 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.