Note 6 - Unpaid Losses and Settlement Expenses

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

6. UNPAID LOSSES AND SETTLEMENT EXPENSES

The following table is a reconciliation of the Company’s unpaid losses and settlement expenses:

	For the Three-Months Ended
	September 30,
(In thousands)	2022		2021
Unpaid losses and settlement expense - beginning of the period:
Gross	$	70,381	$	63,858
Less: Ceded		15,527		15,918
Net		54,854		47,940
Increase in incurred losses and settlement expense:
Current year		9,825		8,582
Prior years		562		233
Total incurred		10,387		8,815
Deduct: Loss and settlement expense payments for claims incurred:
Current year		5,758		5,384
Prior years		5,620		4,557
Total paid		11,378		9,941
Net unpaid losses and settlement expense - end of the period		53,862		46,815
Plus: Reinsurance recoverable on unpaid losses		14,768		14,476
Gross unpaid losses and settlement expense - end of the period	$	68,630	$	61,291

	For the Nine-Months Ended
	September 30,
(In thousands)	2022		2021
Unpaid losses and settlement expense - beginning of the period:
Gross	$	61,835	$	61,576
Less: Ceded		14,521		13,020
Net		47,314		48,556
Increase in incurred losses and settlement expense:
Current year		29,309		23,818
Prior years		5,081		1,464
Total incurred		34,390		25,282
Deduct: Loss and settlement expense payments for claims incurred:
Current year		11,752		10,195
Prior years		16,089		16,829
Total paid		27,841		27,024
Net unpaid losses and settlement expense - end of the period		53,862		46,815
Plus: Reinsurance recoverable on unpaid losses		14,768		14,476
Gross unpaid losses and settlement expense - end of the period	$	68,630	$	61,291

For the nine months ended September 30, 2022 and 2021, we experienced unfavorable development of $5,081,000 and $1,464,000, respectively. The unfavorable development for the nine months ended September 30, 2022 was primarily driven by additional information received on prior accident year claims for the following lines of business and denoted accident years: Business Owners Liability (2020; one claim & 2017; one claim) and Liquor Liability (2021; two claims & 2020; one claim). The Business Owners Property line of business was the primary driver of adverse development for the nine months ended September 30, 2021.