Note 6 - Unpaid Losses and Settlement Expenses

9 Months Ended

Sep. 30, 2023

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)	2023		2022
Unpaid losses and settlement expense - beginning of the period:
Gross	$	76,584	$	70,381
Less: Ceded		14,603		15,527
Net		60,981		54,854
Increase in incurred losses and settlement expense:
Current year		11,331		9,825
Prior years		2,105		562
Total incurred		13,436		10,387
Deduct: Loss and settlement expense payments for claims incurred:
Current year		4,329		5,758
Prior years		7,011		5,620
Total paid		11,340		11,378
Net unpaid losses and settlement expense - end of the period		64,077		53,862
Plus: Reinsurance recoverable on unpaid losses net of CECL		16,350		14,768
Plus: CECL allowance for reinsurance recoverable on unpaid losses		115		—
Gross unpaid losses and settlement expense - end of the period	$	80,542	$	68,630

	For the Nine-Months Ended
	September 30,
(In thousands)	2023		2022
Unpaid losses and settlement expense - beginning of the period:
Gross	$	67,614	$	61,835
Less: Ceded		13,610		14,521
Net		54,004		47,314
Increase in incurred losses and settlement expense:
Current year		33,333		29,309
Prior years		3,366		5,081
Total incurred		36,699		34,390
Deduct: Loss and settlement expense payments for claims incurred:
Current year		9,045		11,752
Prior years		17,581		16,089
Total paid		26,626		27,841
Net unpaid losses and settlement expense - end of the period		64,077		53,862
Plus: Reinsurance recoverable on unpaid losses net of CECL		16,350		14,768
Plus: CECL allowance for reinsurance recoverable on unpaid losses		115		—
Gross unpaid losses and settlement expense - end of the period	$	80,542	$	68,630

For the nine months ended September 30, 2023 and 2022, we experienced unfavorable development of $3,366,000 and $5,081,000, respectively. The unfavorable development for the nine months ended  September 30, 2023 is primarily due to additional information received on prior year accident claims for liquor liability (2022; two claims & 2021; three claims).