Unpaid Loss and Loss Adjustment Expense ("LAE")

6 Months Ended

Jun. 30, 2020

Unpaid Loss and Loss Adjustment Expense ("LAE")

Unpaid Loss and Loss Adjustment Expense (“LAE”)

The following table presents the activity in the liability for unpaid loss and LAE in the six months ended June 30, 2020 and 2019 ($ in millions):


	Six Months Ended June 30,
	2020		2019
Unpaid loss and LAE at beginning of period	$	28.2	$	13.1
Less: Reinsurance recoverable at beginning of period ^(1).	18.5		11.3
Net unpaid loss and LAE at beginning of period	9.7		1.8
Add: Incurred loss and LAE, net of reinsurance, related to:
Current year	33.5		15.4
Prior years	5.2		2.4
Total incurred	38.7		17.8
Deduct: Paid loss and LAE, net of reinsurance, related to:
Current year	24.4		11.6
Prior years	13.2		4.2
Total paid	37.6		15.8
Unpaid loss and LAE, net of reinsurance recoverable, at end of period	10.8		3.8
Reinsurance recoverable at end of period ⁽¹⁾	24.5		16.9
Unpaid loss and LAE, gross of reinsurance recoverable, at end of period	$	35.3	$	20.7

⁽¹⁾ Reinsurance recoverable in this table includes only ceded unpaid loss and LAE

Unpaid loss and LAE includes anticipated salvage and subrogation recoverable.

Considerable variability is inherent in the estimate of the reserve for losses and LAE. Although management believes the liability recorded for losses and LAE is adequate, the variability inherent in this estimate could result in changes to the ultimate liability, which may be material to stockholders' equity. Additional variability exists due to accident year allocations of ceded amounts in accordance with reinsurance agreements, which is not expected to result in any changes to the ultimate liability. The Company had gross loss and loss adjustment expense reserve redundancies of $2.6 million and $1.2 million developed in the six months ended June 30, 2020 and 2019, respectively. No additional premiums or returned premiums have been accrued as a result of prior year effects