Unpaid Claims

3 Months Ended

Mar. 31, 2023

Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract]

Activity within the liability for Unpaid claims, including claims adjustment expenses, for the three months ended March 31, 2023 and 2022, respectively, is summarized as follows:


Three Months Ended March 31,	2023		2022
	(in thousands)

Gross and net balance, beginning of period (1)	$	137,395	$	136,137
Incurred related to:
Current year	272,258		272,151
Prior years	804		(7,056)
Total incurred	273,062		265,095
Paid related to:
Current year	167,360		164,034
Prior years	104,581		84,180
Total paid	271,941		248,214

Gross and net balance, end of period (1)(2)	$	138,516	$	153,018

(1) Includes amounts due to related parties.

(2) Differs from the total Unpaid claims amount reported on the Consolidated Balance Sheets due to the fact the figure here excludes unpaid claims for the Company's Non-Insurance operations of $4.1 million and $13.2 million at March 31, 2023 and 2022, respectively.

The Company uses a variety of standard actuarial techniques to establish unpaid claims reserves. Management estimates are supported by the Company's actuarial analysis. The Company utilizes an internal actuarial team to review the adequacy of unpaid claim and unpaid claim adjustment expense. The estimation of claim costs is inherently difficult and requires significant judgment. The estimation has considerable inherent variability and can fluctuate significantly depending upon several factors, including medical cost trends and claim payment patterns, general economic conditions, and regulatory changes. The time value of money is not taken into account for the purposes of calculating the liability for unpaid claims. Management believes that the current reserves are adequate based on currently available information.

Unpaid Claims for Insurance Operations

Unpaid claims for Insurance operations were $138.5 million at March 31, 2023. During the three months ended March 31, 2023, $104.6 million was paid for incurred claims attributable to insured events of prior years. An unfavorable development of $0.8 million was recognized during the three months ended March 31, 2023, resulting from the Company's actual experience with claims developing differently as compared to the Company's estimates at December 31, 2022. A favorable development of $7.1 million was recognized during the three months ended March 31, 2022, resulting from the Company's actual experience with claims developing differently as compared to the Company's estimates at December 31, 2021. Original estimates are increased or decreased, as additional information becomes known regarding individual claims. The ratio of current year medical claims paid as a percentage of current year Net medical claims incurred was 61.5% for the three months ended March 31, 2023, and 60.3% for the three months ended March 31, 2022. This ratio serves as an indicator of claims processing speed, indicating that claims were processed at a faster rate during the three months ended March 31, 2023, than during the three months ended March 31, 2022.