Loss and Loss Adjustment Expense Reserves

9 Months Ended

Sep. 30, 2017

Insurance Loss Reserves [Abstract]

Loss and Loss Adjustment Expense Reserves

7. Loss and Loss Adjustment Expense Reserves

The Company continually revises its estimates of the ultimate financial impact of claims made. A significant degree of judgment is required to determine amounts recorded in the consolidated financial statements for the provision for loss and loss adjustment expense (“LAE”) reserves. The process for establishing this provision reflects the uncertainties and significant judgmental factors inherent in predicting future results of both known and unknown loss events. The process of establishing the provision for loss and LAE reserves relies on the judgment and opinions of a large number of individuals, including the opinions of the Company’s independent actuaries.

 The Company’s evaluation of the adequacy of loss and loss adjustment expense reserves includes a re-estimation of the liability for loss and LAE reserves relating to each preceding financial year compared to the liability that was previously established. The results of this comparison and the changes in the provision, net of amounts recoverable from reinsurers, for the nine months ended September 30, 2017 and 2016 were as follows:

	Three months ended September 30,						Nine months ended  September 30,
	2017			2016			2017			2016
Balance, beginning of period, gross of reinsurance	$	9,583		$	5,884		$	6,971		$	2,123
Less reinsurance recoverable on loss and LAE expense reserves		(6,012	)		(3,431	)		(3,652	)		(120	)
Balance, beginning of period, net of reinsurance		3,571			2,453			3,319			2,003
Incurred related to:
Current year		8,717			6,487			15,953			15,090
Prior years		(922	)		(44	)		(2,144	)		(173	)
Paid related to:
Current year		(7,246	)		(5,671	)		(12,060	)		(12,719	)
Prior years		411			36			(537	)		(940	)
Balance, September 30, net of reinsurance		4,531			3,261			4,531			3,261
Plus reinsurance recoverable related to loss and LAE expense reserves		17,560			5,366			17,560			5,366
Balance, September 30, gross of reinsurance	$	22,091		$	8,627		$	22,091		$	8,627