Unpaid Losses and Settlement Expenses

9 Months Ended

Sep. 30, 2019

Unpaid Losses and Settlement Expenses [Abstract]

Unpaid Losses and Settlement Expenses

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)	2019		2018
Unpaid losses and settlement expense - beginning of the period:
Gross	$	61,264	$	51,388
Less: Ceded		13,974		8,288
Net		47,290		43,100
Increase in incurred losses and settlement expense:
Current year		9,092		8,324
Prior years		517		288
Total incurred		9,609		8,612
Deduct: Loss and settlement expense payments for claims incurred:
Current year		6,064		3,613
Prior years		4,778		3,365
Total paid		10,842		6,978
Net unpaid losses and settlement expense - end of the period		46,057		44,734
Plus: Reinsurance recoverable on unpaid losses		12,266		9,479
Gross unpaid losses and settlement expense - end of the period	$	58,323	$	54,213

	For the Nine-Months Ended
	September 30,
(In thousands)	2019		2018
Unpaid losses and settlement expense - beginning of the period:
Gross	$	51,447	$	51,074
Less: Ceded		6,736		10,030
Net		44,711		41,044
Increase in incurred losses and settlement expense:
Current year		25,779		22,587
Prior years		2,338		1,811
Total incurred		28,117		24,398
Deduct: Loss and settlement expense payments for claims incurred:
Current year		10,455		7,511
Prior years		16,316		13,197
Total paid		26,771		20,708
Net unpaid losses and settlement expense - end of the period		46,057		44,734
Plus: Reinsurance recoverable on unpaid losses		12,266		9,479
Gross unpaid losses and settlement expense - end of the period	$	58,323	$	54,213

Net unpaid losses and settlement expense increased $1,323,000, or 3.0%, in the nine months ended September 30, 2019 as compared to the same period in 2018. For the nine months ended September 30, 2019 and 2018, we experienced unfavorable development of $2,338,000 and $1,811,000, respectively. The 2019 increase in unfavorable development was primarily driven by the Liquor Liability and Business Owners Liability lines of business. We experienced favorable development on Workers’ Compensation, Umbrella Liability, and Busines Owners Property lines of business for the nine months ended September 30, 2019. Business Owners and Wokers’ Compensation Liability lines of business were the drivers of adverse development while we experienced favorable development on the Liquor Liability and the Umbrella Liability lines of business for the nine months ended September 30, 2018.