Reserve for Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

Schedule of reconciliation of beginning and ending reserve balances for losses and loss adjustment expenses (LAE)

The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses ("LAE") for the years ended December 31:

($ in thousands)	2020		2019		2018
Reserve for losses and LAE at beginning of year	$	69,362	$	49,464	$	46,850
Less: Reinsurance recoverables	71		—		—
Net reserve for losses and LAE at beginning of year	69,291		49,464		46,850
Add provision for losses and LAE, net of reinsurance, occurring in:
Current year	317,516		50,562		36,438
Prior years	(16,223)		(17,576)		(24,863)
Net incurred losses and LAE during the current year	301,293		32,986		11,575
Deduct payments for losses and LAE, net of reinsurance, occurring in:
Current year	1,018		1,288		1,310
Prior years	13,686		11,871		7,651
Net loss and LAE payments during the current year	14,704		13,159		8,961
Net reserve for losses and LAE at end of year	355,880		69,291		49,464
Plus: Reinsurance recoverables	19,061		71		—
Reserve for losses and LAE at end of year	$	374,941	$	69,362	$	49,464
Loans in default at end of year	31,469		5,947		4,024

The following table summarizes incurred loss and allocated loss adjustment expense development, IBNR plus expected development on reported defaults and the cumulative number of reported defaults. The information about incurred loss development for the years ended December 31, 2011 to 2019 is presented as supplementary information.

	Incurred Loss and Allocated LAE, For the Years Ended December 31,																				As of December 31, 2020
($ in thousands)																					Total of IBNR plus Expected Development on Reported Defaults		Cumulative Number of Reported Defaults (1)
	Unaudited
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
2011	$	57	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	1
2012			1,523		858		814		781		748		809		808		808		808		—		19
2013					2,986		2,461		2,008		1,997		2,060		2,058		2,058		2,058		—		51
2014							6,877		4,312		3,323		2,984		2,930		2,897		2,882		1		92
2015									14,956		9,625		8,893		8,439		8,461		8,323		18		214
2016											21,889		11,890		9,455		9,219		8,972		45		252
2017													38,178		16,261		12,202		11,488		85		365
2018															36,438		23,168		19,536		424		606
2019																	50,562		39,085		2,151		1,551
2020																			317,516		23,023		29,834
Total																			$	410,668
(1) Cumulative number of reported defaults includes cumulative paid claims plus loans in default by accident year as of December 31, 2020.

The following table summarizes cumulative paid losses and allocated loss adjustment expenses, net of reinsurance. The information about paid loss development for the years ended December 31, 2011 through 2019 is presented as supplementary information.

($ in thousands)	Cumulative Paid Losses and Allocated LAE For the Years Ended December 31,
	Unaudited
Accident Year	2011		2012		2013		2014		2015		2016		2017		2018		2019		2020
2011	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2012			24		535		659		665		665		808		808		808		808
2013					239		928		1,501		1,775		1,880		2,058		2,058		2,058
2014							138		1,587		2,463		2,787		2,897		2,882		2,867
2015									544		3,610		6,960		7,535		7,961		8,055
2016											927		4,896		6,947		7,864		8,270
2017													633		5,370		9,156		10,257
2018															1,310		8,067		13,406
2019																	1,288		8,049
2020																			1,018
Total																			$	54,788
All outstanding liabilities before 2011, net of reinsurance																			—
Reserve for losses and LAE, net of reinsurance																			$	355,880

The following table provides a reconciliation of the net incurred losses and paid claims development tables above to the reserve for losses and LAE at December 31, 2020:

($ in thousands)	December 31, 2020
Reserve for losses and LAE, net of reinsurance	$	355,880
Reinsurance recoverables on unpaid claims	19,061
Total gross reserve for losses and LAE	$	374,941

For our mortgage insurance portfolio, our average annual payout of losses as of December 31, 2020 is as follows:

Average Annual Percentage Payout of Incurred Losses and Allocated LAE by Year
Year	1		2		3		4		5		6		7		8		9
Average Payout	6	%	40	%	28	%	9	%	4	%	7	%	0	%	0	%	0	%