Reserves for Unpaid Losses and Loss Adjustment Expenses

3 Months Ended

Mar. 31, 2021

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:

	March 31,
	2021		2020
	(in thousands)
Gross reserves for unpaid losses and loss adjustment expenses, beginning of year	$	636,013	$	460,058
Less: reinsurance recoverable on unpaid losses	83,730		69,792
Adoption of accounting standard for credit losses	—		(282)
Net reserves for unpaid losses and loss adjustment expenses, beginning of year	552,283		390,548
Incurred losses and loss adjustment expenses:
Current year	77,333		56,742
Prior years	(7,073)		(3,009)
Total net losses and loss adjustment expenses incurred	70,260		53,733
Payments:
Current year	1,018		777
Prior years	27,571		21,270
Total payments	28,589		22,047
Net reserves for unpaid losses and loss adjustment expenses, end of period	593,954		422,234
Reinsurance recoverable on unpaid losses	94,819		69,099
Gross reserves for unpaid losses and loss adjustment expenses, end of period	$	688,773	$	491,333

During the three months ended March 31, 2021, the reserves for unpaid losses and loss adjustment expenses held at December 31, 2020 developed favorably by $7.1 million. The favorable development was primarily attributable to the 2020 accident year of $9.5 million, which resulted from reported losses emerging at a lower level than expected across most statutory lines of business.

During the three months ended March 31, 2020, the reserves for unpaid losses and loss adjustment expenses held at December 31, 2019 developed favorably by $3.0 million across substantially all accident years, which resulted from reported losses emerging at a lower level than expected across most statutory lines of business.