Reserves for Unpaid Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2016

Reserves for Unpaid Losses and Loss Adjustment Expenses [Abstract]

Activity in the Reserves for Unpaid Losses and Loss Adjustment Expense

Activity in the consolidated reserves for unpaid losses and LAE is summarized as follows (in thousands):

		2016		2015		2014
Balance at January 1	$	450,878	$	415,135	$	382,640
Less reinsurance recoverable		102,791		91,943		70,172
Net balance at January 1		348,087		323,192		312,468
Incurred related to:
Current year		246,080		237,102		215,258
Prior years		7,608		(6,953)		(5,203)
Total incurred		253,688		230,149		210,055
Paid related to:
Current year		93,067		83,132		76,231
Prior years		150,378		122,122		123,100
Total paid		243,445		205,254		199,331
Net balance at December 31		358,330		348,087		323,192
Plus reinsurance recoverable		123,237		102,791		91,943
Balance at December 31	$	481,567	$	450,878	$	415,135

Schedule of Incurred and Paid Claims Development

The following tables also include IBNR reserves plus expected development on reported claims and the cumulative number of reported claims as of December 31, 2016 ($ in thousands):

Specialty Commercial Segment

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						As of December 31,
Accident Year		For the Years Ended December 31,																				IBNR	Cumulative Number of Reported Claims
		Unaudited
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2016	2016
2007	$	51,458	$	52,141	$	51,813	$	52,673	$	50,158	$	49,654	$	49,096	$	49,056	$	49,290	$	49,544	$	68	6,095
2008				55,617		56,150		58,143		57,923		56,579		55,157		55,425		55,457		55,864		(102)	7,367
2009						60,950		62,679		61,196		59,471		59,831		59,635		59,988		61,361		87	5,456
2010								74,187		78,089		75,695		77,593		78,003		77,972		77,631		1,227	4,999
2011										88,679		87,558		91,059		90,713		89,737		87,793		1,641	5,782
2012												106,371		111,253		111,841		115,709		116,320		2,020	7,337
2013														140,546		135,114		137,230		143,983		2,127	9,188
2014																144,996		133,464		138,842		6,547	10,049
2015																		147,304		146,610		23,447	10,707
2016																				151,494		52,283	10,424
																		Total	$	1,029,442

Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
Accident Year		For the Years Ended December 31,
		Unaudited
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007	$	18,851	$	33,504	$	41,344	$	44,861	$	47,453	$	48,612	$	48,612	$	48,783	$	48,860	$	49,025
2008				24,134		37,803		44,903		51,280		53,723		53,577		54,080		54,909		55,372
2009						21,259		34,411		45,757		53,135		56,791		57,641		59,149		60,785
2010								24,818		45,234		58,139		68,625		73,398		74,513		75,787
2011										27,454		53,509		71,697		80,004		83,787		84,936
2012												37,655		60,923		82,066		97,680		109,060
2013														40,475		76,366		101,725		126,025
2014																42,097		73,631		99,521
2015																		39,515		74,906
2016																				41,397
																		Total	$	776,814
								All outstanding liabilities before 2007, net of reinsurance												(26)
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	252,602

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Standard Commercial Segment

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						As of December 31,
Accident Year		For the Years Ended December 31,																				IBNR	Cumulative Number of Reported Claims
		Unaudited
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2016	2016
2007	$	48,423	$	45,280	$	42,632	$	42,898	$	41,814	$	39,476	$	37,894	$	36,798	$	37,321	$	36,419	$	576	3,156
2008				49,452		47,557		46,762		45,556		42,758		41,597		40,387		40,001		39,195		1,826	3,246
2009						44,719		45,674		46,772		46,778		45,970		44,159		43,851		43,107		2,102	2,632
2010								45,263		45,235		44,847		43,164		43,459		42,426		42,175		2,252	2,903
2011										60,236		56,489		55,156		49,268		47,266		47,423		3,387	4,364
2012												51,998		52,554		48,222		45,990		44,272		5,144	3,212
2013														55,482		57,528		56,703		53,174		6,379	3,910
2014																55,488		55,808		53,568		8,979	3,531
2015																		49,571		49,857		11,946	3,129
2016																				46,880		16,885	2,554
																		Total	$	456,070

Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
Accident Year		For the Years Ended December 31,
		Unaudited
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007	$	13,883	$	20,362	$	25,484	$	28,908	$	31,311	$	32,288	$	32,949	$	33,561	$	33,982	$	34,483
2008				17,182		25,624		29,058		32,523		34,056		34,762		35,360		36,276		36,859
2009						15,242		28,313		32,075		35,818		38,316		40,389		40,575		40,629
2010								21,302		28,342		30,957		33,428		37,166		39,115		39,706
2011										24,899		35,119		38,909		40,301		41,140		42,441
2012												23,445		32,203		34,789		37,191		38,526
2013														23,123		36,411		41,809		44,475
2014																24,255		37,122		41,514
2015																		19,085		34,245
2016																				21,508
																		Total	$	374,386
								All outstanding liabilities before 2007, net of reinsurance												538
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	82,222

Personal Segment

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																						As of December 31,
Accident Year		For the Years Ended December 31,																				IBNR	Cumulative Number of Reported Claims
		Unaudited
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2016	2016
2007	$	28,774	$	31,603	$	31,252	$	31,485	$	31,651	$	31,931	$	32,272	$	32,517	$	32,528	$	32,528	$	-	15,814
2008				36,247		36,976		38,329		39,412		39,793		40,170		40,239		40,324		40,369		-	17,353
2009						40,436		42,092		46,244		47,977		48,930		49,694		49,772		49,891		-	21,052
2010								63,862		78,294		80,765		84,724		83,903		84,252		84,591		6	30,179
2011										75,746		77,652		87,810		86,757		86,804		86,948		(28)	31,612
2012												58,604		73,795		70,552		71,513		72,042		50	23,937
2013														55,706		59,132		60,100		60,211		234	23,461
2014																5,452		5,340		6,243		406	19,275
2015																		23,104		25,682		1,813	23,234
2016																				32,260		6,638	21,134
																		Total	$	490,765

Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
Accident Year		For the Years Ended December 31,
		Unaudited
		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
2007	$	$       18,106	$	27,757	$	30,043	$	30,975	$	31,355	$	31,523	$	32,056	$	31,213	$	32,531	$	32,530
2008				20,005		32,555		36,782		38,925		39,511		40,210		40,309		40,323		40,347
2009						23,306		37,621		44,689		47,967		49,287		49,539		49,704		49,853
2010								38,643		67,755		75,199		82,624		83,511		84,111		84,556
2011										46,416		67,939		83,497		85,533		86,217		86,593
2012												37,860		64,278		68,849		70,807		71,995
2013														45,901		54,514		58,047		59,775
2014																2,515		4,418		5,631
2015																		11,570		22,281
2016																				21,669
																		Total	$	475,230
						All outstanding liabilities before 2007, net of reinsurance														9
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	15,544

Reconciliation of Claims Development to Liability for Unpaid Losses

The reconciliation of the net incurred and paid development tables to the liability for unpaid losses and LAE in our Consolidated Balance Sheets is as follows (in thousands):

		2016
Net outstanding liabilities for losses and LAE
Specialty Commercial Segment	$	252,602
Standard Commercial Segment		82,222
Personal Segment		15,544
Liabilities for unpaid losses and allocated loss adjustment expenses, net of reinsurance		350,368
Reinsurance recoverable on unpaid losses and LAE
Specialty Commercial Segment		102,597
Standard Commercial Segment		8,540
Personal Segment		12,100
Total reinsurance recoverable on unpaid losses and LAE		123,237
Unallocated loss adjustment expenses
Specialty Commercial Segment		3,831
Standard Commercial Segment		3,031
Personal Segment		1,100
Total unallocated loss adjustment expenses		7,962
Total reserves for unpaid losses and loss adjustment expenses	$	481,567

Annual percentage payout of incurred losses and ALAE

The following table provides supplementary unaudited information about the annual percentage payout of incurred losses and ALAE, net of reinsurance, as of December 31, 2016:

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (1)
	Unaudited
	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
Specialty Commercial Segment	32.4%	24.8%	17.4%	12.0%	6.0%	1.2%	1.2%	1.5%	0.5%	-0.3%
Standard Commercial Segment	44.6%	23.0%	8.7%	6.6%	5.0%	3.3%	1.3%	1.4%	1.3%	-1.4%
Personal Segment	51.5%	29.2%	10.9%	4.3%	1.4%	0.8%	0.7%	-0.7%	1.9%	0.0%

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The average annual percentage payout is calculated from a paid losses and ALAE development pattern based on an actuarial analysis of the paid losses and ALAE movements by accident year for each disaggregation category.  The paid losses and ALAE development pattern provides the expected percentage of ultimate losses and ALAE to be paid in each year.  The pattern considers all accident years included in the claims development tables