Reserve for Unpaid Losses

12 Months Ended

Dec. 31, 2013

Reserves [Abstract]

Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

RESERVE FOR UNPAID LOSSES

We determine the reserve for unpaid losses on an individual-case basis for all incidents reported. The liability also includes amounts for IBNR claims as of the balance sheet date.

The table below summarizes the activity related to our reserve for unpaid losses:

	2013		2012		2011
Balance at January 1	$	35,692	$	33,600	$	47,414
Less: reinsurance recoverable on unpaid losses	1,935		3,318		23,814
Net balance at January 1	$	33,757	$	30,282	$	23,600
Incurred related to:
Current year	94,752		57,739		43,019
Prior years	4,078		670		(4,158		)
Total incurred	$	98,830	$	58,409	$	38,861
Paid related to:
Current year	62,494		37,906		28,857
Prior years	24,599		17,028		3,322
Total paid	$	87,093	$	54,934	$	32,179
Net balance at December 31	$	45,494	$	33,757	$	30,282
Plus: reinsurance recoverable on unpaid losses	1,957		1,935		3,318
Balance at December 31	$	47,451	$	35,692	$	33,600

Based upon our internal analysis and our review of the statement of actuarial opinion provided by our actuarial consultants, we believe that the reserve for unpaid losses reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

As reflected by our losses incurred related to prior years, we had a reserve deficiency in 2013 and in 2012, and a redundancy in 2011. Since we place substantial reliance on loss-development-based actuarial models when determining our estimate of ultimate losses, the deficiencies in 2013 and 2012 resulted from additional development on prior accident years which caused our ultimate losses to increase whereas the redundancy we experienced in 2011 resulted from reductions to our estimate of ultimate losses because of continued favorable loss development on claims incurred in prior years. The adverse development experienced in 2013 was primarily the result of higher overall frequency and severity of water related losses.