Reserves for Unpaid Losses and Loss Adjustment Expenses	6 Months Ended
Jun. 30, 2013
Reserve for Losses and Loss Adjustment Expenses [Abstract]
Reserve for Losses and Loss Adjustment Expenses	7. Reserves for Unpaid Losses and Loss Adjustment Expenses Unpaid losses and loss adjustment expenses (“LAE”) represent the estimated ultimate net cost of all reported and unreported losses incurred through each balance sheet date. The reserves for unpaid losses and LAE are estimated using individual case-basis valuations and statistical analyses. These reserves are revised periodically and are subject to the effects of trends in loss severity and frequency. Due to the inherent uncertainty in estimating unpaid losses and LAE, the actual ultimate amounts may differ from the recorded amounts. The estimates are periodically reviewed and adjusted as experience develops or new information becomes known. Such adjustments are included in current operations. We recorded $5.4 million and $7.4 million of unfavorable prior years’ loss development during the three and six months ended June 30, 2013, respectively. For the year to date, the $7.4 million unfavorable development was attributable to $2.9 million unfavorable development on claims incurred in the 2012 accident year, $3.2 million unfavorable development on claims incurred in the 2011 accident year and $2.4 million on claims incurred in the 2010 accident year,partially offset by $1.1 million favorable development on claims incurred in the 2009 and prior accident years. Our E&S Commercial business unit accounted for $9.3 million of the unfavorable development during the six months ended June 30, 2013 primarily in our commercial auto liability line of business. Our Personal Lines business unit accounted for $1.0 million of the unfavorable development. These unfavorable developments were partially offset by favorable development of $0.7 million in our Hallmark Select business unit, $1.2 million in our Standard Commercial P&C business unit and $1.0 million in our Workers Compensation business unit. The unfavorable development for our E&S Commercial business unit of $9.3 million was driven by unfavorable claims development primarily in our commercial auto liability line of business in the 2012, 2011, and 2010 accident years. The favorable development for our Hallmark Select business unit of $0.7 million was driven by favorable claims development in the 2011 and prior accident years related to our aircraft liability lines of business, partially offset by unfavorable claims development in the 2012 accident year related to our aircraft hull coverage. The unfavorable loss development for our Personal Lines business unit of $1.0 million was attributable to the 2012 and 2010 accident years, partially offset by favorable development in the 2011 accident year. The favorable loss development for our Standard Commercial P&C business unit of $1.2 million was primarily related to commercial auto liability in the 2010 and prior accident years, partially offset by unfavorable loss development related to commercial property in the 2012 accident year. The favorable loss development in our Workers Compensation business unit of $1.0 million was related to the 2012 and 2011 accident years. We recorded $1.6 million of unfavorable prior years’ loss development during the three months ended June 30, 2012. We recorded $1.4 million of favorable prior years’ loss development during the six months ended June 30, 2012. For the year to date, our Hallmark Select business unit experienced $2.7 million of favorable prior years’ loss development related to our liability and aircraft lines of business. Our Standard Commercial P&C business unit experienced $1.9 million of favorable prior years’ loss development primarily related to commercial property and auto liability partially offset by the late development of a general liability claim. Our Workers Compensation business unit experienced $0.9 million of favorable prior years’ loss development. These favorable developments were partially offset by unfavorable prior year loss development in our Personal Lines business unit and our E&S Commercial business unit for the six months ended June 30, 2012. Our Personal Lines business unit experienced $2.3 million of unfavorable prior years’ loss development of which $1.6 million is the result of unfavorable development in auto liability claims spread throughout various states. The remaining unfavorable prior years’ loss development for our Personal Lines business unit was the result of $0.7 million of unfavorable prior years’ loss development in our low value dwelling/homeowners line of business. For the year to date, our E&S Commercial business unit had $1.8 million of unfavorable prior years’ loss development related primarily to commercial auto liability and physical damage.

7. Reserves for Unpaid Losses and Loss Adjustment Expenses

Unpaid losses and loss adjustment expenses (“LAE”) represent the estimated ultimate net cost of all reported and unreported losses incurred through each balance sheet date. The reserves for unpaid losses and LAE are estimated using individual case-basis valuations and statistical analyses. These reserves are revised periodically and are subject to the effects of trends in loss severity and frequency. Due to the inherent uncertainty in estimating unpaid losses and LAE, the actual ultimate amounts may differ from the recorded amounts. The estimates are periodically reviewed and adjusted as experience develops or new information becomes known. Such adjustments are included in current operations.

We recorded $5.4 million and $7.4 million of unfavorable prior years’ loss development during the three and six months ended June 30, 2013, respectively. For the year to date, the $7.4 million unfavorable development was attributable to $2.9 million unfavorable development on claims incurred in the 2012 accident year, $3.2 million unfavorable development on claims incurred in the 2011 accident year and $2.4 million on claims incurred in the 2010 accident year,partially offset by $1.1 million favorable development on claims incurred in the 2009 and prior accident years. Our E&S Commercial business unit accounted for $9.3 million of the unfavorable development during the six months ended June 30, 2013 primarily in our commercial auto liability line of business. Our Personal Lines business unit accounted for $1.0 million of the unfavorable development. These unfavorable developments were partially offset by favorable development of $0.7 million in our Hallmark Select business unit, $1.2 million in our Standard Commercial P&C business unit and $1.0 million in our Workers Compensation business unit. The unfavorable development for our E&S Commercial business unit of $9.3 million was driven by unfavorable claims development primarily in our commercial auto liability line of business in the 2012, 2011, and 2010 accident years. The favorable development for our Hallmark Select business unit of $0.7 million was driven by favorable claims development in the 2011 and prior accident years related to our aircraft liability lines of business, partially offset by unfavorable claims development in the 2012 accident year related to our aircraft hull coverage. The unfavorable loss development for our Personal Lines business unit of $1.0 million was attributable to the 2012 and 2010 accident years, partially offset by favorable development in the 2011 accident year. The favorable loss development for our Standard Commercial P&C business unit of $1.2 million was primarily related to commercial auto liability in the 2010 and prior accident years, partially offset by unfavorable loss development related to commercial property in the 2012 accident year. The favorable loss development in our Workers Compensation business unit of $1.0 million was related to the 2012 and 2011 accident years.

We recorded $1.6 million of unfavorable prior years’ loss development during the three months ended June 30, 2012. We recorded $1.4 million of favorable prior years’ loss development during the six months ended June 30, 2012. For the year to date, our Hallmark Select business unit experienced $2.7 million of favorable prior years’ loss development related to our liability and aircraft lines of business. Our Standard Commercial P&C business unit experienced $1.9 million of favorable prior years’ loss development primarily related to commercial property and auto liability partially offset by the late development of a general liability claim. Our Workers Compensation business unit experienced $0.9 million of favorable prior years’ loss development. These favorable developments were partially offset by unfavorable prior year loss development in our Personal Lines business unit and our E&S Commercial business unit for the six months ended June 30, 2012. Our Personal Lines business unit experienced $2.3 million of unfavorable prior years’ loss development of which $1.6 million is the result of unfavorable development in auto liability claims spread throughout various states. The remaining unfavorable prior years’ loss development for our Personal Lines business unit was the result of $0.7 million of unfavorable prior years’ loss development in our low value dwelling/homeowners line of business. For the year to date, our E&S Commercial business unit had $1.8 million of unfavorable prior years’ loss development related primarily to commercial auto liability and physical damage.