Note 6 - Unpaid Losses and Settlement Expenses

6 Months Ended

Jun. 30, 2024

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
	June 30,
(In thousands)	2024		2023
Unpaid losses and settlement expense - beginning of the period:
Gross	$	77,651	$	72,867
Less: Ceded		13,739		14,460
Less: CECL allowance for reinsurance recoverable on unpaid losses		88		—
Net		63,824		58,407
Increase in incurred losses and settlement expense:
Current year		11,867		10,929
Prior years		2,686		1,285
Total incurred		14,553		12,214
Deduct: Loss and settlement expense payments for claims incurred:
Current year		3,047		3,558
Prior years		8,519		5,082
Total paid		11,566		8,640
Net unpaid losses and settlement expense - end of the period		66,811		61,981
Plus: Reinsurance recoverable on unpaid losses net of CECL		12,374		14,502
Plus: CECL allowance for reinsurance recoverable on unpaid losses1		79		101
Gross unpaid losses and settlement expense - end of the period	$	79,264	$	76,584

	For the Six-Months Ended
	June 30,
(In thousands)	2024		2023
Unpaid losses and settlement expense - beginning of the period:
Gross	$	71,920	$	67,614
Less: Ceded		12,737		13,610
Less: CECL allowance for reinsurance recoverable on unpaid losses		82		—
Net		59,101		54,004
Increase in incurred losses and settlement expense:
Current year		24,155		22,001
Prior years		2,735		1,261
Total incurred		26,890		23,262
Deduct: Loss and settlement expense payments for claims incurred:
Current year		4,971		4,716
Prior years		14,209		10,569
Total paid		19,180		15,285
Net unpaid losses and settlement expense - end of the period		66,811		61,981
Plus: Reinsurance recoverable on unpaid losses net of CECL		12,374		14,502
Plus: CECL allowance for reinsurance recoverable on unpaid losses1		79		101
Gross unpaid losses and settlement expense - end of the period	$	79,264	$	76,584

¹ See page 7, Significant account policies, for an explanation of CECL.

For the  six months ended  June 30, 2024 and  2023, we experienced  unfavorable development of  $2,735,000 and  $1,261,000, respectively. The  unfavorable development for the  six months ended  June 30, 2024 is primarily due to additional information received on prior year accident claims for liquor liability.