Loss Reserves

3 Months Ended

Mar. 31, 2012

Loss Reserves [Abstract]

Loss Reserves

Note 7 – Loss Reserves

A summary of the Company's loss reserves, broken down into its components of known title claims, incurred but not reported claims ("IBNR") and non-title claims, follows:

(in thousands, except percentages)	March 31, 2012				December 31, 2011
Known title claims	$	150,463	15.1	%	$	162,019	15.9	%
IBNR		806,828	81.3	%		816,603	80.5	%
Total title claims		957,291	96.4	%		978,622	96.4	%
Non-title claims		35,428	3.6	%		36,054	3.6	%
Total loss reserves	$	992,719	100.0	%	$	1,014,676	100.0	%

The provision for title insurance losses was $52.2 million, or 7.2% of title premiums and escrow fees, and $96.4 million, or 13.9% of title premiums and escrow fees, for the three months ended March 31, 2012 and 2011, respectively. The current quarter rate of 7.2% reflected an ultimate loss rate of 6.2% for the current policy year and included $7.2 million in net unfavorable development for prior policy years, primarily 2007 and 2008. Approximately $4.3 million of the net unfavorable development related to the Company's guaranteed valuation product offered in Canada. There is substantial uncertainty as to the ultimate loss emergence for this product due to the following factors, among others, (i) claims associated with this product are generally made only after a foreclosure on the related property and foreclosure rates in Canada are difficult to predict and (ii) limited historical loss data exists as a result of the relatively recent introduction of this product in 2003. While the Company believes its claims reserve attributable to this product is adequate, because of this uncertainty, the potential for adverse loss development relative to this product is significantly higher than for title insurance. The first quarter of 2011 rate of 13.9% reflected an ultimate loss rate of 5.2% for the 2011 policy year, a $45.3 million reserve strengthening adjustment related to the guaranteed valuation product offered in Canada, and a $14.6 million charge which reflected adverse development for certain prior policy years.