Unpaid Claims

6 Months Ended

Jun. 30, 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 six months ended June 30, 2023 and 2022, respectively, is summarized as follows:


Six Months Ended June 30,	2023		2022
	(in thousands)

Gross and net balance, beginning of period (1)	$	137,395	$	136,317
Incurred related to:
Current year	515,089		529,440
Prior years	(3,168)		(20,228)
Total incurred	511,921		509,212
Paid related to:
Current year	409,780		408,580
Prior years	122,956		84,180
Total paid	532,736		492,760

Gross and net balance, end of period (1)(2)	$	116,580	$	152,769

(1) Includes amounts due to related parties.

(2) Differs from the total Unpaid claims amount reported on the Condensed Consolidated Balance Sheets due to the fact the figure here excludes unpaid claims for the Company's Non-Insurance operations of $2.2 million and $8.9 million at June 30, 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 $116.6 million at June 30, 2023. During the six months ended June 30, 2023, $123.0 million was paid for incurred claims attributable to insured events of prior years. A favorable development of $3.2 million was recognized during the six months ended June 30, 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 $20.2 million was recognized during the six months ended June 30, 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 79.6% for the six months ended June 30, 2023, and 77.2% for the six months ended June 30, 2022. This ratio serves as an indicator of claims processing speed, indicating that claims were processed at a faster rate during the six months ended June 30, 2023, than during the six months ended June 30, 2022.