XML 48 R19.htm IDEA: XBRL DOCUMENT v3.25.1
Property and Casualty Insurance Activity
 12 Months Ended
Dec. 31, 2024
Property and Casualty Insurance Activity  
Property and Casualty Insurance Activity Property and Casualty Insurance Activity
Premiums written, ceded and earned are as follows:
 Direct Assumed Ceded Net
    
Year ended December 31, 2024   
Premiums written$241,979,937 $- $(87,750,072)$154,229,865 
Change in unearned premiums(29,080,195)- 3,348,250 (25,731,945)
Premiums earned$212,899,742 $- $(84,401,822)$128,497,920 
     
Year ended December 31, 2023    
Premiums written$200,174,502 $- $(106,563,985)$93,610,517 
Change in unearned premiums1,871,239 - 18,902,507 20,773,746 
Premiums earned$202,045,741 $- $(87,661,478)$114,384,263 
Premium receipts in advance of the policy effective date are recorded as advance premiums. The balance of advance premiums as of December 31, 2024 and 2023 was $3,503,063 and $3,797,590, respectively.
The components of the liability for loss and LAE expenses and related reinsurance receivables as of December 31, 2024 and 2023 are as follows:
 Gross
Liability 		Reinsurance
Receivables
   
December 31, 2024  
Case-basis reserves$64,087,782 $17,721,033 
Loss adjustment expenses23,442,101 3,940,147 
IBNR reserves38,680,545 10,661,457 
Recoverable on unpaid losses 32,322,637 
Recoverable on paid losses- 5,254,482 
Total loss and loss adjustment expenses$126,210,428 37,577,119 
Unearned premiums 31,745,317 
Receivables - reinsurance contracts - 
Total reinsurance receivables $69,322,436 
   
December 31, 2023  
Case-basis reserves$67,108,131 $19,537,988 
Loss adjustment expenses17,448,218 3,085,429 
IBNR reserves37,261,513 10,665,233 
Recoverable on unpaid losses 33,288,650 
Recoverable on paid losses- 15,376,899 
Total loss and loss adjustment expenses$121,817,862 48,665,549 
Unearned premiums 26,928,363 
Receivables - reinsurance contracts - 
Total reinsurance receivables $75,593,912 
The following table provides a reconciliation of the beginning and ending balances for unpaid losses and LAE:
 Years ended
December 31,
 20242023
   
Balance at beginning of period$121,817,862 $118,339,513 
Less reinsurance recoverables(33,288,650)(27,659,500)
Net balance, beginning of period88,529,212 90,680,013 
   
Incurred related to:  
Current year64,414,543 82,856,483 
Prior years(1,779,827)(7,273)
Total incurred62,634,716 82,849,210 
   
Paid related to:  
Current year32,956,899 49,146,173 
Prior years24,319,238 35,853,838 
Total paid57,276,137 85,000,011 
   
Net balance at end of period93,887,791 88,529,212 
Add reinsurance recoverables32,322,637 33,288,650 
Balance at end of period$126,210,428 $121,817,862 
Incurred losses and LAE are net of reinsurance recoveries under reinsurance contracts of $20,226,354 and $41,091,205 for the years ended December 31, 2024 and 2023, respectively.
Prior year incurred loss and LAE development is based upon estimates by line of business and accident year. Prior year loss and LAE development incurred during the years ended December 31, 2024 and 2023 was $1,779,827 favorable and $7,273 favorable, respectively.
Loss and LAE reserves
The reserving process for loss and LAE reserves provides for the Company’s best estimate at a particular point in time of the ultimate unpaid cost of all losses and LAE incurred, including settlement and administration of losses, and is based on facts and circumstances then known including losses that have occurred but that have not yet been reported. The process relies on standard actuarial reserving methodologies, judgments relative to estimates of ultimate claim severity and frequency, the length of time before losses will develop to their ultimate level (‘tail’ factors), and the likelihood of changes in the law or other external factors that are beyond the Company’s control. Several actuarial reserving methodologies are used to estimate required loss reserves. The process produces carried reserves set by management based upon the actuaries’ best estimate and is the cumulative combination of the best estimates made by line of business, accident year, and loss and LAE. The amount of loss and LAE reserves for individual reported claims (the “case reserve”) is determined by the claims department and changes over time as new information is gathered. Such information is critical to the review of appropriate IBNR reserves and includes a review of coverage applicability, comparative liability on the part of the insured, injury severity, property damage, replacement cost estimates, and any other information considered pertinent to estimating the exposure presented by the claim. The amounts of loss and LAE reserves for unreported claims and development on known claims (IBNR reserves) are determined using historical information aggregated by line of insurance as adjusted to current conditions. Since this process produces loss reserves set by management based upon the actuaries’ best estimate, there is no explicit or implicit provision for uncertainty in the carried loss reserves.
Due to the inherent uncertainty associated with the reserving process, the ultimate liability may differ, perhaps substantially, from the original estimate. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current period’s results. Reserves are closely monitored and are recomputed periodically using the most recent information on reported claims and a variety of statistical techniques. On at least a quarterly basis, the Company reviews by line of business existing reserves, new claims, changes to existing case reserves, and paid losses with respect to the current and prior periods. Several methods are used, varying by line of business and accident year, in order to select the estimated period-end loss reserves. These methods include the following:
Paid Loss Development – historical patterns of paid loss development are used to project future paid loss emergence in order to estimate required reserves.
Incurred Loss Development – historical patterns of incurred loss development, reflecting both paid losses and changes in case reserves, are used to project future incurred loss emergence in order to estimate required reserves.
Paid Bornhuetter-Ferguson (“BF”) – an estimated loss ratio for a particular accident year is determined, and is weighted against the portion of the accident year claims that have been paid, based on historical paid loss development patterns. The estimate of required reserves assumes that the remaining unpaid portion of a particular accident year will pay out at a rate consistent with the estimated loss ratio for that year. This method can be useful for situations where an unusually high or low amount of paid losses exists at the early stages of the claims development process.
Incurred Bornhuetter-Ferguson (“BF”) - an estimated loss ratio for a particular accident year is determined, and is weighted against the portion of the accident year claims that have been reported, based on historical incurred loss development patterns. The estimate of required reserves assumes that the remaining unreported portion of a particular accident year will pay out at a rate consistent with the estimated loss ratio for that year. This method can be useful for situations where an unusually high or low amount of reported losses exists at the early stages of the claims development process.
Incremental Claim-Based Methods – historical patterns of incremental incurred losses and paid LAE during various stages of development are reviewed and assumptions are made regarding average loss and LAE development applied to remaining claims inventory. Such methods more properly reflect changes in the speed of claims closure and the relative adequacy of case reserve levels at various stages of development. These methods may provide a more accurate estimate of IBNR for lines of business with relatively few remaining open claims but for which significant recent settlement activity has occurred.
Frequency / Severity Based Methods – historical measurements of claim frequency and average paid claim size (severity) are reviewed for more mature accident years where a majority of claims have been reported and/or closed. These historical averages are trended forward to more recent periods in order to estimate ultimate losses for newer accident years that are not yet fully developed. These methods are useful for lines of business with slow and/or volatile loss development patterns, such as liability lines where information pertaining to individual cases may not be completely known for many years. The claim frequency and severity information for older periods can then be used as reasonable measures for developing a range of estimates for more recent immature periods.
Management’s best estimate of required reserves is generally based on an average of the methods above, with appropriate weighting of methods based on the line of business and accident year being projected. In some cases, additional methods or historical data from industry sources are employed to supplement the projections derived from the methods listed above.
Three key assumptions that materially affect the estimate of loss reserves are the loss ratio estimate for the current accident year used in the BF methods, the loss development factor selections used in the loss development methods, and the loss severity assumptions used in the frequency / severity method described above. The loss ratio estimates used in the BF methods are selected after reviewing historical accident year loss ratios adjusted for rate changes, trend, and mix of business. The severity assumptions used in the frequency / severity method are determined by reviewing historical average claim severity for older more mature accident periods, trended forward to less mature accident periods.
The Company reviews the carried reserves levels on a regular basis as additional information becomes available and makes adjustments in the periods in which such adjustments are determined to be necessary. The Company is not aware of any claim trends that have emerged or that would cause future adverse development that have not already been contemplated in setting current carried reserves levels.
In New York State, lawsuits for negligence are subject to certain limitations and must be commenced within three years from the date of the accident or are otherwise barred. Accordingly, the Company’s exposure to unreported claims (“pure” IBNR) for accident dates of December 31, 2021 and prior is limited, although there remains the possibility of adverse development on reported claims (“case development” IBNR). In certain rare circumstances states have retroactively revised a statute of limitations. The Company is not aware of any such effort that would have a material impact on the Company’s results.
The following is information about incurred and paid claims development as of December 31, 2024, net of reinsurance, as well as the cumulative reported claims by accident year and total IBNR reserves as of December 31, 2024 included in the net incurred loss and allocated expense amounts. The historical information regarding incurred and paid claims development for the years ended December 31, 2015 to December 31, 2023 is presented as supplementary unaudited information.
All Lines of Business
(in thousands, except reported claims data)
 Incurred Loss and Allocated Loss Adjustment Expenses, Net of ReinsuranceAs of
December 31, 2024
 For the Years Ended December 31, IBNRCumulative
Number
of Reported
Claims by
Accident
Year
Accident Year2015201620172018201920202021202220232024
 (Unaudited 2015 - 2023)  
            
2015$22,340 $21,994 $22,148 $22,491 $23,386 $23,291 $23,528 $23,533 $23,428 $23,518 $290 $2,560 
2016 26,062 24,941 24,789 27,887 27,966 27,417 27,352 27,271 27,247 79 2,883 
2017  31,605 32,169 35,304 36,160 36,532 36,502 36,819 37,268 113 3,401 
2018   54,455 56,351 58,441 59,404 61,237 61,145 61,686 1,383 4,237 
2019    75,092 72,368 71,544 71,964 73,310 74,363 1,832 4,508 
2020     63,083 62,833 63,217 63,562 64,400 1,312 5,894 
2021      96,425 96,673 96,134 96,771 2,761 5,834 
2022       79,835 78,759 78,078 4,619 4,708 
2023        78,978 72,025 9,668 4,084 
2024         57,860 14,254 2,985 
          Total $593,216   
All Lines of Business
(in thousands)
Accident YearCumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance
For the Years Ended December 31,
2015201620172018201920202021202220232024
 (Unaudited 2015 - 2023)
           
2015$12,295 $16,181 $18,266 $19,984 $21,067 $22,104 $22,318 $22,473 $22,519 $22,547 
2016 15,364 19,001 21,106 23,974 25,234 25,750 26,382 26,854 26,808 
2017  16,704 24,820 28,693 31,393 32,529 33,522 34,683 35,046 
2018   32,383 44,516 50,553 52,025 54,424 56,199 57,185 
2019    40,933 54,897 58,055 60,374 63,932 66,109 
2020     39,045 50,719 53,432 56,523 59,220 
2021      56,282 77,756 82,317 85,314 
2022       45,856 65,732 68,170 
2023        46,280 56,952 
2024         29,013 
         Total$506,365 
           
Net liability for unpaid loss and allocated loss adjustment expenses for the accident years presented$86,851 
All outstanding liabilities before 2015, net of reinsurance 968 
Liabilities for loss and allocated loss adjustment expenses, net of reinsurance $87,819 
(Components may not sum to totals due to rounding)
Reported claim counts are measured on an occurrence or per event basis. A single claim occurrence could result in more than one loss type or claimant; however, the Company counts claims at the occurrence level as a single claim regardless of the number of claimants or claim features involved.
The reconciliation of the net incurred and paid claims development tables to the liability for loss and LAE reserves in the consolidated balance sheet is as follows:
Reconciliation of the Disclosure of Incurred and Paid Loss Development
to the Liability for Loss and LAE Reserves
(in thousands)As of
December 31, 2024
Liabilities for allocated loss and loss adjustment expenses, net of reinsurance$87,819 
Total reinsurance recoverable on unpaid losses32,323 
Unallocated loss adjustment expenses6,069 
Total gross liability for loss and LAE reserves$126,210 
(Components may not sum to totals due to rounding)
The following is supplementary unaudited information about average historical claims duration as of December 31, 2024:
Average Annual Percentage Payout of Incurred Loss and Allocated Loss Adjustment Expenses by Age, Net of Reinsurance
Years12345678910
All Lines of Business55.3 %19.0 %6.6 %5.5 %4.2 %3.0 %2.0 %1.1 %— %0.1 %
The percentages in the above table do not add up to 100 because the percentages represent averages across all accident years at each development stage.