Note 5.

Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses

The roll-forward of liabilities for unpaid losses, claims and loss adjustment expenses, by major product, is as follows:

Property and Casualty Insurance Products	Nine Months Ended September 30,
	2017			2016
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	49,556		$	51,200
Less: Reinsurance recoverable on unpaid losses		(9,806	)		(11,639	)
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net		39,750			39,561

Incurred related to:
Current accident year		27,359			26,534
Prior accident year development ⁽¹⁾		(1,480	)		(1,296	)
Total incurred		25,879			25,238

Paid related to:
Current accident year		9,858			9,799
Prior accident years		13,720			15,950
Total paid		23,578			25,749
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net		42,051			39,050
Plus: Reinsurance recoverable on unpaid losses		9,455			9,234
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	51,506		$	48,284

⁽¹⁾

In establishing property and casualty reserves, the Company initially reserves for losses at the higher end of the reasonable range if no other value within the range is determined to be more probable. Selection of such an initial loss estimate is an attempt by management to give recognition that initial claims information received generally is not conclusive with respect to legal liability, is generally not comprehensive with respect to magnitude of loss and generally, based on historical experience, will develop more adversely as time passes and more information becomes available. However, as a result, the Company generally experiences reserve redundancies when analyzing the development of prior year losses in a current period.

Medicare Supplement Insurance Products	Nine Months Ended September 30,
	2017			2016
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	11,263		$	10,547
Less: Reinsurance recoverable on unpaid losses		(990	)		-
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net		10,273			10,547

Incurred related to:
Current accident year		50,733			46,295
Prior accident year development		720			(1,009	)
Total incurred		51,453			45,286

Paid related to:
Current accident year		40,801			35,986
Prior accident years		10,445			9,267
Total paid		51,246			45,253
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net		10,480			10,580
Plus: Reinsurance recoverable on unpaid losses		3,640			-
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	14,120		$	10,580

Other Life and Health Insurance Products	Nine Months Ended September 30,
	2017			2016
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	1,743		$	2,123
Less: Reinsurance recoverable on unpaid losses		-			-
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net		1,743			2,123

Incurred related to:
Current accident year		6,226			5,489
Prior accident year development		(104	)		(173	)
Total incurred		6,122			5,316

Paid related to:
Current accident year		4,807			4,206
Prior accident years		1,500			1,494
Total paid		6,307			5,700
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net		1,558			1,739
Plus: Reinsurance recoverable on unpaid losses		-			-
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	1,558		$	1,739

Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred:

	Nine Months Ended September 30,
	2017		2016
Total incurred losses	$	83,454	$	75,840
Cash surrender value and matured endowments		1,167		1,037
Benefit reserve changes		2,825		1,825
Total insurance benefits and losses incurred	$	87,446	$	78,702