Losses and Loss Adjustment Expenses

3 Months Ended

Mar. 31, 2019

8.	Losses and Loss Adjustment Expenses

The following tables provide a reconciliation of our beginning and ending unpaid losses and loss adjustment expense reserve balances for the interim periods ended March 31, 2019 and 2018.

	2019		2018
Balance at January 1	$	68,392,333	$	68,374,554
Less: Reinsurance recoverable on liability for losses and loss adjustment expenses		7,956,043		8,585,851
Add: Reinsurance recoverable on claims paid		5,791		1,196,573
Net liability at January 1		60,442,081		60,985,276
Losses and loss adjustment expenses incurred, net:
Current period		3,321,676		3,349,701
Prior periods		—		—
Total incurred losses and loss adjustment expenses		3,321,676		3,349,701
Less losses and loss adjustment expenses paid, net:
Current period		79,592		17,060
Prior periods		5,013,009		3,568,087
Total losses and loss adjustment expenses paid		5,092,601		3,585,147
Net liability for liability for losses and loss adjustment expenses, at end of period		58,671,156		60,749,830
Add: Reinsurance recoverable on liability for losses and loss adjustment expenses		8,207,848		8,292,102
Less: Reinsurance recoverable on claims paid		257,892		545,506
Liability for losses and loss adjustment expenses, March 31	$	66,621,112	$	68,496,426

The liability for losses and loss adjustment expenses at March 31, 2019 and 2018 were $66,621,112 and $68,496,426, respectively. For the interim periods ended March 31, 2019 and 2018, $5,013,009 and $3,568,087, respectively, has been paid for incurred claims attributable to insured events of prior years. Original estimates are increased or decreased, as additional information becomes known regarding individual claims. There were no favorable or unfavorable developments for the interim periods ended March 31, 2019 and 2018.

Positive Insurance Company uses a combination of the Actual versus Expected Method, Bornhuetter-Ferguson Method, Expected Loss Ratio Method, Frequency/Severity Method, and the Loss Development Method in order to estimate its liability for losses and loss adjustment expenses. There were no significant changes in the methodologies and assumptions used to develop the liabilities for losses and loss adjustment expenses for the interim periods ended March 31, 2019 and 2018.