Reserve for Known and Incurred but Not Reported Claims

9 Months Ended

Sep. 30, 2015

Reserve for Known and Incurred but Not Reported Claims

Note 6 – Reserve for Known and Incurred But Not Reported Claims

A summary of the Company’s loss reserves is as follows:

(in thousands, except percentages)	September 30, 2015				December 31, 2014
Known title claims	$	84,478	8.7	%	$	165,330	16.3	%
Incurred but not reported claims		830,255	85.5	%		802,069	79.3	%
Total title claims		914,733	94.2	%		967,399	95.6	%
Non-title claims		56,720	5.8	%		44,381	4.4	%
Total loss reserves	$	971,453	100.0	%	$	1,011,780	100.0	%

The Company’s reserve for known title claims was $84.5 million at September 30, 2015, a decline of $80.9 million, or 48.9%, from the balance at December 31, 2014. This decline is primarily attributable to settlement payments associated with certain large claims during the first quarter of 2015. The reserve for known title claims associated with these claims recorded at December 31, 2014 was $56.0 million. The Company paid $35.0 million, net of $21.0 million recovered through reinsurance, during the first quarter of 2015 to settle these claims.

The provision for title insurance losses, expressed as a percentage of title insurance premiums and escrow fees, was 6.5% for the three and nine months ended September 30, 2015 and 6.7% and 7.2% for the three and nine months ended September 30, 2014, respectively.

The current quarter rate of 6.5% reflects the ultimate loss rate of 6.0% for the current policy year and a $5.5 million net increase in the loss reserve estimates for prior policy years.

The third quarter of 2014 rate of 6.7% reflected the ultimate loss rate of 6.0% for the 2014 policy year and a $6.8 million net increase in the loss reserve estimates for prior policy years. The rate for the nine months ended September 30, 2014 of 7.2% included the impact of a large commercial claim from policy year 2007, net of anticipated recoveries.