Insurance Reserves and Policyholder Funds

12 Months Ended

Dec. 31, 2024

Insurance Reserves and Policyholder Funds [Abstract]

Insurance Reserves and Policyholder Funds

Note 7. Insurance Reserves and Policyholder Funds

The following table presents the Company’s reserves for life, accident and health, and property and casualty losses, claims and loss adjustment expenses at December 31, 2024 and 2023.

					Amount of Insurance In Force, Net
	2024		2023		2024		2023
Future policy benefits
Life insurance policies:
Ordinary life and annuities	$	49,467	$	50,040	$	165,856	$	172,907
Group life		19,129		11,917		809,896		633,017
		68,596		61,957	$	975,752	$	805,924
Accident and health insurance policies		29,868		30,538
		98,464		92,495
Unearned premiums		31,178		31,317
Losses, claims and loss adjustment expenses		93,707		87,478
Other policy liabilities		1,757		1,132
Total insurance reserves and policyholder funds	$	225,106	$	212,422

Annualized premiums for accident and health insurance policies were $82,730 and $84,127 at December 31, 2024 and 2023, respectively.

Future Policy Benefits

Liabilities for future benefits on life insurance policies and accident and health insurance policies are based on assumed investment yields, mortality rates, disablement rates, benefit utilization rates, and lapse rates after giving effect to possible risks of unexpected adverse claim experience. The mortality, morbidity, and lapse assumptions are based upon the Company’s experience and incorporate a margin for adverse experience development.  These assumptions are modified as necessary to reflect anticipated trends and are generally established at contract inception.  The interest rates assumed, which reflect future investment yields at the time policies are issued, are generally: (i) 2.5% to 5.5% for issues prior to 1977, (ii) 5.5% to 7.0% for 1977 through 1979 issues, (iii) 9.0% for 1980 through 1987 issues, (iv) 5.0% to 7.0% for 1988 through 2009 issues, and (v) 3.0% to 4.0% for 2010 through 2024 issues.

Loss and Claim Reserves

Loss and claim reserves represent estimates of projected ultimate losses and are based upon: (a) management’s estimate of ultimate liability and claims adjusters’ evaluations for unpaid claims reported prior to the close of the accounting period, (b) estimates of incurred but not reported (“IBNR”) claims based on past experience, and (c) estimates of loss adjustment expenses. The estimated liability is periodically reviewed by management and updated, with changes to the estimated liability recorded in the statement of operations in the year in which such changes are known.

Activity in the liability for unpaid loss and claim reserves is summarized as follows:

	2024			2023
Balance at January 1	$	87,478		$	87,484
Less: Reinsurance recoverable on unpaid losses		(14,678	)		(17,647	)
Net balance at January 1		72,800			69,837
Incurred related to:
Current year		112,393			113,246
Prior years		5,708	(1)		1,418	(2)
Total incurred		118,101			114,664
Paid related to:
Current year		64,300			67,484
Prior years		50,284			44,217
Total paid		114,584			111,701
Net balance at December 31		76,317			72,800
Plus: Reinsurance recoverable on unpaid losses		17,390			14,678
Balance at December 31	$	93,707		$	87,478

(1) Prior years’ development was primarily the result of unfavorable development in the automobile liability line of business in the property and casualty operations due to frequency and severity in the inflationary factors, as well as unfavorable development in the 2021 and 2022 accident years.

(2) Prior years’ development was primarily the result of unfavorable development in the property and casualty operations predominately in the automobile liability line of business due to inflationary factors, partially offset by favorable development in the Medicare supplement line of business in the life and health operations.

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

	2024		2023
Total incurred losses	$	118,101	$	114,664
Cash surrender value and matured endowments		1,225		1,323
Benefit reserve changes		6,505		6,513
Total insurance benefits and losses incurred	$	125,831	$	122,500

Liability for Unpaid Losses, Claims and Loss Adjustment Expenses

The following is information, by significant product lines, about incurred and paid claims development as of December 31, 2024, net of reinsurance, as well as the cumulative number of reported claims and the total of IBNR reserves plus expected development on reported claims included within the net incurred claims amounts. The information presented for the years ended December 31, 2015 and prior is presented as supplementary information and is unaudited.

Medicare Supplement

	For the Years Ended December 31,																				As of December 31, 2024
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance																				IBNR Reserves		Cumulative Number of Reported Claims
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	55,482	$	54,939	$	54,993	$	54,990	$	54,984	$	54,985	$	54,985	$	54,985	$	54,985	$	54,985	$	—		898
2016				58,849		59,851		63,226		63,225		63,221		63,221		63,221		63,221		63,221		—		1,037
2017						67,960		69,655		69,643		69,635		69,633		69,633		69,632		69,633		—		1,512
2018								79,140		80,404		80,361		80,357		80,351		80,348		80,348		—		2,052
2019										88,765		87,028		86,988		86,986		86,980		86,978		—		2,246
2020												75,857		75,715		75,730		75,730		75,708		—		1,853
2021														65,267		61,579		61,785		61,740		14		1,771
2022																58,777		56,047		55,970		50		2,107
2023																		48,367		47,029		234		2,159
2024																				43,708		12,208		1,769
																			$	639,320

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	45,430	$	54,876	$	54,993	$	54,990	$	54,984	$	54,985	$	54,985	$	54,985	$	54,985	$	54,985
2016				49,165		59,747		63,226		63,225		63,221		63,221		63,221		63,221		63,221
2017						57,696		69,517		69,643		69,635		69,633		69,633		69,633		69,633
2018								66,565		80,222		80,361		80,355		80,351		80,348		80,348
2019										72,333		86,856		86,978		86,985		86,980		86,978
2020												63,129		75,527		75,710		75,715		75,708
2021														50,197		61,350		61,733		61,726
2022																46,111		55,808		55,920
2023																		36,388		46,795
2024																				31,500
																			$	626,814
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance																			$	12,506

The cumulative number of reported claims for the Medicare Supplement line of business is the number of distinct claims incurred and submitted to the Centers for Medicare and Medicaid Services (or its designee) for payment in the given year. Multiple payments on the same claim are not counted in the claim frequency data. For Medicare Supplement policies, the estimated ultimate claims incurred, using claims data reported during each month of any given year, are calculated using the chain ladder method. Because claim patterns vary significantly during the year, this method is modified to reflect claim experience over the corresponding four-month period prior to the statement date during the prior two calendar years, and recent claim experience during a twelve-month period from sixteen months prior to the valuation date through five months prior to the valuation date. Additional adjustments to the estimated ultimate claims incurred are then applied to account for seasonal changes in claim experience and changes in the rate of claim processing. The liability for Medicare Supplement claims that are Incurred but Not Reported (the IBNR) is calculated by subtracting both paid claims through the valuation date and claims in the course of settlement as of the valuation date from the estimated ultimate claims. Thirty-six months of loss data are used to develop the estimated ultimate incurred claims. For other accident and health products and life products, similar approaches are used and modified to reflect the unique aspects of the products.

Automobile Liability

	For the Years Ended December 31,																				As of December 31, 2024
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance																				IBNR Reserves		Cumulative Number of Reported Claims
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	18,521	$	19,857	$	20,017	$	20,007	$	20,086	$	20,680	$	20,849	$	20,955	$	21,021	$	21,016	$	—		3,537
2016				20,549		21,275		21,846		22,388		22,245		22,310		22,448		22,448		22,448		—		3,863
2017						22,179		24,212		23,766		25,180		26,009		26,153		26,231		26,254		1		3,813
2018								24,284		25,682		27,338		30,013		30,464		31,135		31,170		109		3,651
2019										25,241		24,045		25,724		28,042		28,513		29,216		71		3,608
2020												22,416		16,442		20,137		21,164		21,459		163		2,523
2021														25,887		21,172		24,957		27,041		733		2,791
2022																28,860		27,293		31,633		2,446		2,918
2023																		33,266		33,626		3,710		2,910
2024																				34,105		15,837		2,450
																			$	277,968

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	6,226	$	11,878	$	14,938	$	17,612	$	19,557	$	20,234	$	20,726	$	20,904	$	21,021	$	21,016
2016				6,796		13,141		16,397		19,613		21,408		21,809		22,448		22,448		22,448
2017						7,401		16,317		20,221		22,778		25,023		25,712		26,222		26,249
2018								6,989		15,647		21,121		24,662		27,671		29,201		30,507
2019										7,305		14,694		19,384		22,868		26,126		28,778
2020												5,172		9,941		14,693		18,133		20,466
2021														6,242		13,918		19,230		24,798
2022																7,023		18,010		24,137
2023																		9,068		22,232
2024																				8,939
																			$	229,570
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance																			$	48,398

Automobile Physical Damage

	For the Years Ended December 31,										As of December 31, 2024
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance										IBNR Reserves		Cumulative Number of Reported Claims
Accident Year	2020		2021		2022		2023		2024
2020	$	10,288	$	10,080	$	10,047	$	10,024	$	10,013	$	4		1,645
2021				14,296		13,385		13,305		13,329		2		1,913
2022						10,962		10,648		10,564		3		1,772
2023								6,460		6,485		13		1,591
2024										7,418		135		1,542
									$	47,809

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2020		2021		2022		2023		2024
2020	$	8,347	$	9,952	$	10,008	$	9,992	$	9,973
2021				11,993		13,277		13,257		13,302
2022						8,475		10,368		10,528
2023								5,397		6,340
2024										5,864
									$	46,007
All outstanding liabilities before 2020, net of reinsurance										6
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance									$	1,808

General Liability

	For the Years Ended December 31,																				As of December 31, 2024
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance																				IBNR Reserves		Cumulative Number of Reported Claims
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	4,421	$	1,037	$	1,227	$	1,044	$	867	$	855	$	855	$	870	$	870	$	871	$	4		150
2016				3,119		1,148		736		608		621		619		620		620		620		—		94
2017						1,490		488		513		738		738		839		777		777		—		84
2018								1,656		333		198		128		183		183		193		2		77
2019										1,916		707		455		515		909		516		19		98
2020												2,223		670		657		363		793		45		91
2021														2,567		1,329		1,328		1,267		33		105
2022																2,770		2,380		2,530		408		135
2023																		2,887		1,445		528		116
2024																				3,139		1,834		86
																			$	12,151

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	98	$	259	$	464	$	664	$	863	$	855	$	855	$	854	$	854	$	855
2016				116		203		568		608		617		619		620		620		620
2017						75		136		365		556		696		741		777		777
2018								65		90		115		128		183		183		185
2019										41		209		242		354		404		433
2020												208		385		462		539		593
2021														364		646		813		1,178
2022																402		1,169		1,622
2023																		125		399
2024																				239
																			$	6,901
All outstanding liabilities before 2015, net of reinsurance																				208
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance																			$	5,458

Surety

	For the Years Ended December 31,																				As of December 31, 2024
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance																				IBNR Reserves		Cumulative Number of Reported Claims
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	1,902	$	1,630	$	1,400	$	1,359	$	1,406	$	1,310	$	1,307	$	1,280	$	1,279	$	1,279	$	—		50
2016				3,314		1,812		1,865		1,876		1,865		1,678		1,670		1,666		1,660		—		47
2017						4,677		3,671		3,799		3,629		3,514		3,440		3,448		3,403		2		67
2018								3,528		1,938		1,381		956		767		750		750		—		64
2019										2,130		657		630		513		507		439		—		32
2020												2,263		574		465		460		402		—		23
2021														2,936		1,455		1,497		1,475		—		36
2022																3,202		2,339		2,296		32		51
2023																		2,634		1,627		12		122
2024																				2,324		1,402		33
																			$	15,655

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024
2015	$	641	$	856	$	1,127	$	1,125	$	1,128	$	1,271	$	1,273	$	1,279	$	1,279	$	1,279
2016				1,054		1,732		1,772		1,873		1,862		1,677		1,670		1,666		1,660
2017						1,971		3,255		3,523		3,545		3,442		3,402		3,400		3,394
2018								1,157		1,454		1,361		941		760		749		748
2019										259		395		568		446		444		439
2020												97		460		464		459		400
2021														156		803		1,496		1,475
2022																970		2,191		2,180
2023																		98		1,602
2024																				392
																			$	13,569
All outstanding liabilities before 2015, net of reinsurance																				78
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance																			$	2,164

For the property and casualty lines of business, the number of claims presented above equals the number of occurrences by type of claim reported to the Company. The number of claims reported during a given year corresponds to the number of claims records opened during the year. Frequency information is maintained on a cumulative basis by accident year by line of business. For automobile claims, a claim count is separately maintained for bodily injury, property damage and physical damage claims. The Company has consistently monitored claim frequency on this basis, and believes this provides more meaningful information than using claimant count which can change over the course of settling a claim.

In general, when a claim is reported, claims representatives establish a “case reserve” for the estimated amount of the ultimate payment based on the known information of the claim at that time. Claims managers review and monitor all property and casualty claims in excess of $25,000. As new information becomes available or payments are made on a claim, the case reserve is adjusted to reflect the revised estimate of the ultimate amount to be paid out. Estimates and assumptions pertaining to individual claims are based on complex and subjective judgments and subject to change at any time as new information becomes available.

In addition to case reserves, IBNR reserves are established to provide for claims which have not been reported to the Company as of the reporting date as well as potential adverse development on known case reserves. IBNR reserve estimates are derived through a number of analytical techniques. Actuarial data is analyzed by line of business, coverage and accident year. Qualitative factors are also considered in determining IBNR reserves and include such factors as judicial decisions, general economic trends such as inflation, changes in policy forms, and underwriting changes. Reserves are reviewed quarterly and any indicated adjustments are made.

Because of the inherent uncertainties in establishing both case and IBNR reserves, ultimate loss experience may prove better or worse than indicated by the combined claim reserves. Adjustments to claim reserves are reflected in the period recognized and could increase or decrease earnings for the period.

The following is supplementary information about average historical claims duration as of December 31, 2024.

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Subrogation and Reinsurance (Unaudited)
Reserve Line	1st Year			2nd Year			3rd Year			4th Year			5th Year			6th Year			7th Year			8th Year			9th Year			10th Year
Medicare Supplement		80.9	%		17.8	%		0.2	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Automobile Liability		25.8	%		29.6	%		17.3	%		13.8	%		9.6	%		4.3	%		2.8	%		0.3	%		0.3	%		0.0	%
Automobile Physical Damage		83.2	%		14.5	%		0.6	%		0.1	%		-0.2	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
General Liability		16.8	%		20.0	%		21.5	%		17.3	%		14.6	%		2.2	%		1.5	%		0.0	%		0.0	%		0.1	%
Surety		48.5	%		49.5	%		13.2	%		11.4	%		-7.1	%		-0.7	%		-0.1	%		0.0	%		-0.2	%		0.0	%

The reconciliation of the net incurred and paid claims development tables to the liability for losses, claims and loss adjustment expenses is as follows:

	December 31, 2024
Net outstanding liabilities
Medicare supplement	$	12,506
Automobile liability		48,398
Automobile physical damage		1,808
General liability		5,458
Surety		2,164
Other short-duration insurance lines		3,778
Liabilities for unpaid losses, claims and loss adjustment expenses, net of reinsurance		74,112
Reinsurance recoverable on unpaid losses:
Medicare supplement		8,788
Automobile liability		5,493
Automobile physical damage		—
General liability		3,109
Other short-duration insurance lines		—
Total reinsurance recoverable on unpaid losses		17,390
Unallocated claims adjustment expenses		2,205
Total gross liability for unpaid losses, claims and loss adjustment expenses	$	93,707