Note 6 - Unpaid Losses and Settlement Expenses

9 Months Ended

Sep. 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
	September 30,
(In thousands)	2024		2023
Unpaid losses and settlement expense - beginning of the period:
Gross	$	79,264	$	76,584
Less: Ceded		12,374		14,603
Less: CECL allowance for reinsurance recoverable on unpaid losses		79		—
Net		66,811		61,981
Increase in incurred losses and settlement expense:
Current year		8,711		11,331
Prior years		5,433		2,105
Total incurred		14,144		13,436
Deduct: Loss and settlement expense payments for claims incurred:
Current year		3,439		4,329
Prior years		6,534		7,011
Total paid		9,973		11,340
Net unpaid losses and settlement expense - end of the period		70,982		64,077
Plus: Reinsurance recoverable on unpaid losses net of CECL		12,520		16,350
Plus: CECL allowance for reinsurance recoverable on unpaid losses1		80		115
Gross unpaid losses and settlement expense - end of the period	$	83,582	$	80,542

	For the Nine-Months Ended
	September 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		32,866		33,333
Prior years		8,168		3,366
Total incurred		41,034		36,699
Deduct: Loss and settlement expense payments for claims incurred:
Current year		8,410		9,045
Prior years		20,743		17,581
Total paid		29,153		26,626
Net unpaid losses and settlement expense - end of the period		70,982		64,077
Plus: Reinsurance recoverable on unpaid losses net of CECL		12,520		16,350
Plus: CECL allowance for reinsurance recoverable on unpaid losses1		80		115
Gross unpaid losses and settlement expense - end of the period	$	83,582	$	80,542

¹ See page 8, Significant account policies, for an explanation of CECL.

For the  nine months ended  September 30, 2024 and  2023, we experienced  unfavorable development of  $8,168,000 and  $3,366,000, respectively. The  unfavorable development for the  nine months ended  September 30, 2024 is primarily due to additional information received on prior year accident claims for Liquor Liability ( 79.3% of increase) and Businessowner's Property ( 15.1% of increase).