Loss and loss adjustment expense reserves

3 Months Ended

Mar. 31, 2014

Loss and Loss Adjustment Expense Reserves [Abstract]

Loss and loss adjustment expense reserves

Loss and loss adjustment expense reserves

As of March 31, 2014 and December 31, 2013, loss and loss adjustment expense reserves in the condensed consolidated balance sheets was comprised of the following:

	March 31, 2014		December 31, 2013
	($ in thousands)
Case loss and loss adjustment expense reserves	$	33,028	$	34,307
Incurred but not reported loss and loss adjustment expense reserves	131,596		100,024
	$	164,624	$	134,331

The following table represents the activity in the reserve for losses and loss adjustment expenses for the three months ended March 31, 2014 and year ended December 31, 2013:

	March 31, 2014			December 31, 2013
	($ in thousands)
Gross reserves for loss and loss adjustment expenses, beginning of period	$	134,331		$	67,271
Less: loss and loss adjustment expenses recoverable, beginning of period	(9,277		)	—
Net reserves for loss and loss adjustment expenses, beginning of period	125,054			67,271
Increase (decrease) in net loss and loss adjustment expenses incurred in respect of losses occurring in:
Current year	43,233			144,509
Prior years'	3,026			(4,697		)
Total incurred loss and loss adjustment expenses	46,259			139,812
Net loss and loss adjustment expenses paid in respect of losses occurring in:
Current year	(3,643		)	(27,528		)
Prior years'	(13,323		)	(54,501		)
Total net paid losses	(16,966		)	(82,029		)
Net reserve for loss and loss adjustment expenses, end of period	154,347			125,054
Plus: loss and loss adjustment expenses recoverable, end of period	10,277			9,277
Gross reserve for loss and loss adjustment expenses, end of period	$	164,624		$	134,331

The $3.0 million increase in prior years' reserves for the three months ended March 31, 2014 reflects $2.0 million of adverse loss development, primarily related to one crop contract, and $1.0 million related to premium estimate increases on certain other contracts. The $4.7 million decrease in prior years' reserves for the year ended December 31, 2013 reflects $1.3 million of favorable loss experience on several contracts and a $3.4 million decrease in the reserve for loss and loss adjustment expenses related to premium estimate decreases, primarily related to one crop contract. The changes in loss and loss adjustment expense reserves related to premium estimate changes were accompanied by similar changes in the premium earned for those contracts, resulting in minimal impact to net underwriting income in both periods.