Reserves for Unpaid Losses and Loss Adjustment Expenses

6 Months Ended

Jun. 30, 2017

Reserves for Unpaid Losses and Loss Adjustment Expenses [Abstract]

Reserves for Unpaid Losses and Loss Adjustment Expenses

6. Reserves for Unpaid Losses and Loss Adjustment Expenses

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

		June 30,		June 30,
		2017		2016
Balance at January 1	$	481,567	$	450,878
Less reinsurance recoverable		123,237		102,791
Net balance at January 1		358,330		348,087
Incurred related to:
Current year		122,862		116,654
Prior years		9,684		(2,757)
Total incurred		132,546		113,897
Paid related to:
Current year		33,687		35,217
Prior years		90,042		88,377
Total paid		123,729		123,594
Net balance at June 30		367,147		338,390
Plus reinsurance recoverable		138,211		105,222
Balance at June 30	$	505,358	$	443,612

The impact from the (favorable) unfavorable net prior years’ loss development on each reporting segment is presented below:

		Six Months Ended June 30,
		2017		2016
Specialty Commercial Segment	$	8,332	$	(1,594)
Standard Commercial Segment		264		(3,674)
Personal Segment		1,088		2,511
Corporate		-		-
Total (favorable) unfavorable net prior year development	$	9,684	$	(2,757)

The following describes the primary factors behind each segment’s prior accident year reserve development for the six months ended June 30, 2017 and 2016:

Six months ended June 30, 2017:

· Specialty Commercial Segment.Our MGA Commercial products operating unit experiencednet unfavorable development primarily in the commercial auto liability line of business in the 2015 and prior accident years, partially offset by favorable development in the 2016 accident year.  Our Specialty Commercial operating unit experienced net unfavorable development in  general aviation primarily in the 2010 accident year, commercial excess liability primarily in the 2013 accident year and specialty risk programs primarily in the 2015, 2013 and 2012 accident years, partially offset by net favorable development in themedical professional liability lines of business primarily in the 2016 accident years.

· Standard Commercial Segment.  Our Standard Commercial P&C operating unit experienced net unfavorable development in the 2016 and prior accident years in the occupational accident line of business,  partially offset by net favorable development primarily in the general liability line of business in the 2016 and prior accident years.

· Personal Segment.Net unfavorable development in our Specialty Personal Lines operating unit was mostly attributable to the 2016, 2014 and 2013 accident years, partially offset by favorable development in the 2015 accident year.

Six months ended June 30, 2016: 

· Specialty Commercial Segment. Our MGA Commercial products operating unit experiencednet favorable development primarily in the commercial auto liability and general liability lines of business in the 2015 and 2011 accident years, partially offset by net unfavorable development in the 2014, 2013 and 2012 accident years.   Our Specialty Commercial operating unit experienced net favorable development primarily in the general aviation, commercial excess liability and medical professional liability lines of business.

· Standard Commercial Segment.  Our Standard Commercial P&C operating unit experienced net favorable development primarily in the general liability line of business in the 2015 and prior accident years.   Our Workers Compensation operating unit experienced net favorable development in the 2015 and prior accident years, partially offset by net unfavorable development in the occupational accident line of business in the 2015 and prior accident years.

· Personal Segment.  Our Specialty Personal Lines operating unit experienced net unfavorable development mostly attributable to the 2015 and 2013 accident years.