XML 35 R19.htm IDEA: XBRL DOCUMENT v3.22.0.1
Loss And Loss Adjustment Expense Reserves
 12 Months Ended
Dec. 31, 2021
Insurance Loss Reserves [Abstract]  
Loss And Loss Adjustment Expense Reserves Loss and Loss Adjustment Expense Reserves
The following table presents the activity in loss and loss adjustment expense reserves:
 Year Ended December 31,
 202120202019
 (Amounts in thousands)
Gross reserves at January 1$1,991,304 $1,921,255 $1,829,412 
Reinsurance recoverables on unpaid losses(54,461)(76,100)(180,859)
             Cumulative effect of adopting ASU 2016-13 — 149 — 
Reinsurance recoverables on unpaid losses, as adjusted(54,461)(75,951)(180,859)
Net reserves at January 1, as adjusted1,936,843 1,845,304 1,648,553 
Incurred losses and loss adjustment expenses related to:
Current year2,786,246 2,372,364 2,696,230 
Prior years(26,091)22,979 9,794 
Total incurred losses and loss adjustment expenses2,760,155 2,395,343 2,706,024 
Loss and loss adjustment expense payments related to:
Current year1,601,998 1,366,661 1,651,550 
Prior years909,949 937,143 857,872 
Total payments2,511,947 2,303,804 2,509,422 
Net reserves at December 312,185,051 1,936,843 1,845,155 
Reinsurance recoverables on unpaid losses41,379 54,461 76,100 
Gross reserves at December 31$2,226,430 $1,991,304 $1,921,255 

The decrease in the provision for insured events of prior years in 2021 of approximately $26.1 million primarily resulted from lower than estimated losses and loss adjustment expenses in the homeowners and private passenger automobile lines of insurance business, partially offset by unfavorable development in the commercial automobile and commercial property lines of insurance business.

The increase in the provision for insured events of prior years in 2020 of approximately $23.0 million primarily resulted from higher than estimated losses and loss adjustment expenses in the homeowners and commercial automobile lines of insurance business, partially offset by favorable development in the private passenger automobile line of insurance business.
The increase in the provision for insured events of prior years in 2019 of approximately $9.8 million primarily resulted from higher than estimated defense and cost containment expenses in the California automobile line of insurance business, partially offset by favorable development in certain of the Company's other lines of insurance business.

The Company recorded catastrophe losses net of reinsurance of approximately $104 million, $64 million, and $53 million in 2021, 2020, and 2019, respectively. Catastrophe losses due to the events that occurred in 2021 totaled approximately $109 million, with no reinsurance benefits used for these losses, resulting primarily from the deep freeze and other extreme weather events in Texas and Oklahoma, rainstorms, wildfires and winter storms in California, and the impact of Hurricane Ida in New Jersey and New York. These losses were partially offset by favorable development of approximately $5 million on prior years' catastrophe losses. Catastrophe losses due to the events that occurred in 2020 totaled approximately $69 million, with no reinsurance benefits used for these losses, resulting primarily from wildfires and windstorms in California and extreme weather events outside of California. These losses were partially offset by favorable development of approximately $5 million on prior years' catastrophe losses. Catastrophe losses due to the events that occurred in 2019 totaled approximately $57 million, with no reinsurance benefits used for these losses, resulting primarily from wildfires and winter storms in California, a hurricane in Texas, and tornadoes and wind and hail storms in the Midwest. These losses were partially offset by favorable development of approximately $4 million on prior years' catastrophe losses.

During the first quarter of 2019, the Company completed the sale of its subrogation rights related to the 2018 Camp and Woolsey Fires and the 2017 Thomas Fire (which was a component of the "2017 Southern California fires") to a third party. The Company’s reinsurers were the primary beneficiaries of this transaction, as they had absorbed most of the losses under the terms of the Treaty. The Company re-estimated its gross and net losses from the 2018 Camp and Woolsey Fires and the 2017 Southern California fires in conjunction with this sale, and its total gross losses from these catastrophes, after accounting for the assignment of subrogation rights and adjustments made to claims reserves as part of normal reserving procedures, were approximately $208 million, and its total net losses, after reinsurance benefits, were approximately $40 million at March 31, 2019. The Company benefited by approximately $10 million, before taxes, in the first quarter of 2019 from the sale of the subrogation rights, including adjustments made to the associated claims as a result of normal reserving procedures, reductions in the Company's retained portion of losses on the Camp and Woolsey Fires, and reduced reinstatement premiums recognized.

The following is information about incurred and paid claims development as of December 31, 2021, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts for our two major product lines: automobile and homeowners lines of business. As the information presented is for these two major product lines only, the total incurred and paid claims development shown below does not correspond to the aggregate development presented in the table above, which is for all product lines and includes unallocated claims adjustment expenses. The cumulative number of reported claims represents open claims, claims closed with payment, and claims closed without payment. It does not include an estimated amount for unreported claims. The number of claims is measured by claim event (such as a car accident or storm damage) and an individual claim event may result in more than one reported claim. The Company considers a claim that does not result in a liability as a claim closed without payment. 

The information about incurred and paid claims development for the years ended December 31, 2012 to 2020 is presented as unaudited supplementary information.
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Automobile Insurance)As of December 31, 2021
Total of Incurred But Not Reported Liabilities Plus Expected Development on Reported ClaimsCumulative Number of Reported Claims
Accident YearFor the Years Ended December 31,
2012(1)
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020(1)
2021
(Amounts in thousands)(Amounts in thousands)
2012$1,424,754 $1,408,222 $1,409,104 $1,414,878 $1,426,735 $1,436,034 $1,438,250 $1,439,660 $1,440,537 $1,441,332 $52 181
20131,448,567 1,431,058 1,447,881 1,458,421 1,464,071 1,468,294 1,468,237 1,468,747 1,468,679 632 185
20141,467,175 1,454,366 1,473,545 1,486,322 1,498,504 1,501,075 1,501,713 1,501,850 225 180
20151,551,105 1,588,443 1,610,839 1,634,435 1,645,950 1,649,170 1,653,878 4,412 170
20161,672,853 1,669,642 1,713,696 1,731,997 1,732,410 1,740,807 6,077 155
20171,703,857 1,727,277 1,741,825 1,733,425 1,748,289 15,917 149
20181,781,817 1,773,502 1,785,071 1,806,240 36,925 146
20191,916,269 1,911,268 1,959,262 93,030 147
20201,514,551 1,448,083 154,412 89
20211,811,064 471,848 97
Total$16,579,484 
__________ 
(1) The information for the years 2012 to 2020 is presented as unaudited supplemental information.

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Automobile Insurance)
For the Years Ended December 31,
Accident Year
2012(1)
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020(1)
2021
(Amounts in thousands)
2012$955,647 $1,194,648 $1,304,511 $1,372,828 $1,409,911 $1,422,705 $1,434,956 $1,438,686 $1,440,482 $1,441,027 
2013974,445 1,217,906 1,340,724 1,413,999 1,447,004 1,460,352 1,464,277 1,466,356 1,467,332 
2014967,481 1,231,413 1,358,472 1,432,472 1,476,944 1,490,366 1,496,814 1,500,243 
20151,040,253 1,336,223 1,466,368 1,560,480 1,614,188 1,634,780 1,643,443 
20161,094,006 1,395,199 1,554,217 1,656,192 1,699,069 1,722,293 
20171,076,079 1,399,202 1,561,850 1,648,328 1,701,298 
20181,082,127 1,417,637 1,588,049 1,697,228 
20191,134,859 1,494,342 1,698,121 
2020825,398 1,089,096 
2021992,705 
Total$14,952,786 
All outstanding liabilities before 2012, net of reinsurance
(1,381)
Loss and allocated loss adjustment expense reserves, net of reinsurance$1,625,317 
__________ 
(1) The information for the years 2012 to 2020 is presented as unaudited supplemental information.
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Homeowners Insurance)As of December 31, 2021
Total of Incurred But Not Reported Liabilities Plus Expected Development on Reported ClaimsCumulative Number of Reported Claims
Accident YearFor the Years Ended December 31,
2012(1)
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020(1)
2021
(Amounts in thousands)(Amounts in thousands)
2012$196,063 $188,010 $190,376 $191,548 $192,057 $191,804 $192,905 $192,790 $193,002 $193,040 $98 25
2013191,903 188,915 188,026 186,795 187,165 188,014 187,147 187,683 187,627 91 23
2014199,298 202,621 203,218 202,513 204,986 208,003 208,743 209,622 1,156 25
2015234,800 234,881 233,501 236,855 238,652 239,941 240,927 3,894 24
2016250,691 259,489 259,497 259,708 260,496 259,984 544 24
2017309,491 295,163 288,322 289,869 289,295 409 30
2018311,798 308,361 310,695 305,292 3,873 25
2019359,643 366,139 361,421 7,765 30
2020420,257 411,404 15,816 29
2021510,724 106,771 28
Total$2,969,336 
__________ 
(1) The information for the years 2012 to 2020 is presented as unaudited supplemental information.

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Homeowners Insurance)
For the Years Ended December 31,
Accident Year
2012(1)
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020(1)
2021
(Amounts in thousands)
2012$128,618 $175,029 $182,756 $188,121 $190,373 $190,649 $191,660 $192,362 $192,454 $192,470 
2013133,528 174,295 180,858 183,860 185,168 186,132 186,494 186,816 187,141 
2014139,615 186,996 194,605 198,758 202,193 203,333 207,524 207,801 
2015163,196 213,994 224,178 230,480 234,683 235,971 236,143 
2016173,537 234,215 245,878 253,919 256,642 258,477 
2017217,900 269,254 278,341 283,311 286,531 
2018213,038 271,534 286,658 294,099 
2019240,240 324,953 340,237 
2020271,208 365,910 
2021316,314 
Total$2,685,123 
All outstanding liabilities before 2012, net of reinsurance
1,916 
Loss and allocated loss adjustment expense reserves, net of reinsurance$286,129 
__________ 
(1) The information for the years 2012 to 2020 is presented as unaudited supplemental information.


The following is unaudited supplementary information about average historical claims duration as of December 31, 2021.
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years12345678910
Automobile insurance61.4 %17.7 %8.8 %5.3 %2.8 %1.1 %0.5 %0.2 %0.1 %— %
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years12345678910
Homeowners insurance67.8 %21.8 %4.0 %2.3 %1.2 %0.5 %0.7 %0.2 %0.1 %— %
The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated balance sheets is as follows:

Reconciliation of the Disclosure of Incurred and Paid Claims Development
to the Loss and Loss Adjustment Expense Reserves
December 31, 2021
(Amounts in thousands)
Net outstanding liabilities
Automobile insurance$1,625,317 
Homeowners insurance286,129 
Other short-duration insurance lines148,389 
Loss and loss adjustment expense reserves, net of reinsurance recoverables on unpaid losses2,059,835 
Reinsurance recoverables on unpaid losses
Automobile insurance16,416 
Homeowners insurance23,958 
Other short-duration insurance lines1,005 
Total reinsurance recoverables on unpaid losses41,379 
Insurance lines other than short-duration706 
Unallocated claims adjustment expenses124,510 
125,216 
Total gross loss and loss adjustment expense reserves$2,226,430