Reserve for Unpaid Losses

12 Months Ended

Dec. 31, 2015

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:



	2015			2014			2013
Balance at January 1	$	54,436		$	47,451		$	35,692
Acquisition of Family Security Insurance Company, Inc. reserves	2,390			—			—
Less: reinsurance recoverable on unpaid losses	1,252			1,957			1,935
Net balance at January 1	$	55,574		$	45,494		$	33,757
Incurred related to:
Current year	185,476			122,114			94,752
Prior years	(2,368		)	(4,037		)	4,078
Total incurred	$	183,108		$	118,077		$	98,830
Paid related to:
Current year	127,306			83,967			62,494
Prior years	36,698			26,420			24,599
Total paid	$	164,004		$	110,387		$	87,093

Net balance at December 31	$	74,678		$	53,184		$	45,494
Plus: reinsurance recoverable on unpaid losses	2,114			1,252			1,957
Balance at December 31	$	76,792		$	54,436		$	47,451

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. Since we place substantial reliance on loss-development-based actuarial models when determining our estimate of ultimate losses, the deficiencies resulted from additional development on prior accident years which caused our ultimate losses to increase. The favorable development experienced in 2015 were primarily the result of losses related to the 2014 and 2013 accident years coming in better than expected. The favorable development experienced in 2014 were primarily the result of losses related to the 2013 and 2012 accident years coming in better than expected.