Reserves for Unpaid Losses and Loss Adjustment Expenses

9 Months Ended

Sep. 30, 2019

Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract]

Reserves for Unpaid Losses and Loss Adjustment Expenses

Reserves for unpaid losses and loss adjustment expenses

The following table presents a reconciliation of consolidated beginning and ending reserves for unpaid losses and loss adjustment expenses:

	September 30,
	2019			2018
	(in thousands)
Net reserves for unpaid losses and loss adjustment expenses, beginning of year	$	313,763		$	267,493
Incurred losses and loss adjustment expenses:
Current year	126,471			96,673
Prior years	(8,350		)	(5,722		)
Total net losses and loss adjustment expenses incurred	118,121			90,951
Payments:
Current year	12,258			4,095
Prior years	53,808			52,056
Total payments	66,066			56,151
Net reserves for unpaid losses and loss adjustment expenses, end of period	365,818			302,293
Reinsurance recoverable on unpaid losses	63,714			63,521
Gross reserves for unpaid losses and loss adjustment expenses, end of period	$	429,532		$	365,814

During the nine months ended September 30, 2019, the reserves for unpaid losses and loss adjustment expenses held at December 31, 2018 developed favorably by $8.4 million. The favorable development was primarily attributable to the 2016 through 2018 accident years of $14.8 million, which mostly resulted from reported losses emerging at a lower level than expected across most statutory lines of business. This favorable development was offset in part by adverse development from the 2011 through 2015 accident years of $6.4 million. This adverse development largely resulted from management’s decision to lengthen the actuarial loss development factors to provide for emergence of reported losses over a longer period of time, which added a modest amount of conservatism to the Company’s incurred but not yet reported ("IBNR") reserves for those years.

During the nine months ended September 30, 2018, the reserves for unpaid losses and loss adjustment expenses held at December 31, 2017 developed favorably by $5.7 million. The favorable development was primarily attributable to the 2016 through 2017 accident years of $8.1 million, which mostly resulted from reported losses emerging at a lower level than expected. This favorable development was offset in part by adverse development from the 2011 through 2015 accident years of $2.4 million.