Reserves for Unpaid Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2017

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):

		2017		2016		2015
Balance at January 1	$	481,567	$	450,878	$	415,135
Less reinsurance recoverable		123,237		102,791		91,943
Net balance at January 1		358,330		348,087		323,192
Incurred related to:
Current year		248,203		246,080		237,102
Prior years		40,105		7,608		(6,953)
Total incurred		288,308		253,688		230,149
Paid related to:
Current year		92,873		93,067		83,132
Prior years		181,277		150,378		122,122
Total paid		274,150		243,445		205,254
Net balance at December 31		372,488		358,330		348,087
Plus reinsurance recoverable		154,612		123,237		102,791
Balance at December 31	$	527,100	$	481,567	$	450,878

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, 2017 ($ 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
		2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		2017	2017
2008	$	55,617	$	56,150	$	58,143	$	57,923	$	56,579	$	55,157	$	55,425	$	55,457	$	55,864	$	56,272	$	(534)	7,373
2009				60,950		62,679		61,196		59,471		59,831		59,635		59,988		61,361		61,761		60	5,459
2010						74,187		78,089		75,695		77,593		78,003		77,972		77,631		78,253		900	5,001
2011								88,679		87,558		91,059		90,713		89,737		87,793		87,833		1,102	5,790
2012										106,371		111,253		111,841		115,709		116,320		117,925		1,094	7,339
2013												140,546		135,114		137,230		143,983		150,177		1,742	9,210
2014														144,996		133,464		138,842		144,728		1,260	10,076
2015																147,304		146,610		162,616		8,213	10,826
2016																		151,494		157,836		21,557	11,358
2017																				170,622		64,261	10,227
																		Total	$	1,188,023

Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
Accident Year		For the Years Ended December 31,
		Unaudited
		2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	24,134	$	37,803	$	44,903	$	51,280	$	53,723	$	53,577	$	54,080	$	54,909	$	55,372	$	56,094
2009				21,259		34,411		45,757		53,135		56,791		57,641		59,149		60,785		61,202
2010						24,818		45,234		58,139		68,625		73,398		74,513		75,787		76,906
2011								27,454		53,509		71,697		80,004		83,787		84,936		85,845
2012										37,655		60,923		82,066		97,680		109,060		113,909
2013												40,475		76,366		101,725		126,025		139,759
2014														42,097		73,631		99,521		123,649
2015																39,515		74,906		125,514
2016																		41,397		84,616
2017																				45,477
																		Total	$	912,971
								All outstanding liabilities before 2008, net of reinsurance												384
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	275,436

(1

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
		2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		2017	2017
2008	$	49,452	$	47,557	$	46,762	$	45,556	$	42,758	$	41,597	$	40,387	$	40,001	$	39,195	$	38,294	$	701	3,256
2009				44,719		45,674		46,772		46,778		45,970		44,159		43,851		43,107		42,168		1,082	2,635
2010						45,263		45,235		44,847		43,164		43,459		42,426		42,175		42,880		1,265	2,914
2011								60,236		56,489		55,156		49,268		47,266		47,423		46,841		2,038	4,370
2012										51,998		52,554		48,222		45,990		44,272		42,986		2,505	3,219
2013												55,482		57,528		56,703		53,174		52,076		4,317	3,920
2014														55,488		55,808		53,568		53,882		5,602	3,555
2015																49,571		49,857		50,053		8,768	3,165
2016																		46,880		48,182		11,673	2,779
2017																				41,393		18,099	2,330
																		Total	$	458,755

Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
Accident Year		For the Years Ended December 31,
		Unaudited
		2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	17,182	$	25,624	$	29,058	$	32,523	$	34,056	$	34,762	$	35,360	$	36,276	$	36,859	$	37,002
2009				15,242		28,313		32,075		35,818		38,316		40,389		40,575		40,629		40,835
2010						21,302		28,342		30,957		33,428		37,166		39,115		39,706		40,937
2011								24,899		35,119		38,909		40,301		41,140		42,441		43,680
2012										23,445		32,203		34,789		37,191		38,526		40,408
2013												23,123		36,411		41,809		44,475		46,756
2014														24,255		37,122		41,514		45,779
2015																19,085		34,245		38,302
2016																		21,508		32,006
2017																				16,755
																		Total	$	382,460
								All outstanding liabilities before 2008, net of reinsurance												1,824
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	78,119

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
		2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		2017	2017
2008	$	36,247	$	36,976	$	38,329	$	39,412	$	39,793	$	40,170	$	40,239	$	40,324	$	40,369	$	40,401	$	-	17,354
2009				40,436		42,092		46,244		47,977		48,930		49,694		49,772		49,891		49,971		-	21,054
2010						63,862		78,294		80,765		84,724		83,903		84,252		84,591		84,808		-	30,180
2011								75,746		77,652		87,810		86,757		86,804		86,948		86,853		-	31,614
2012										58,604		73,795		70,552		71,513		72,042		72,037		-	23,938
2013												55,706		59,132		60,100		60,211		60,379		69	23,468
2014														5,452		5,340		6,243		6,699		239	19,297
2015																23,104		25,682		25,307		642	23,512
2016																		32,260		32,893		1,309	24,988
2017																				23,342		4,253	17,532
																		Total	$	482,690

Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
Accident Year		For the Years Ended December 31,
		Unaudited
		2008		2009		2010		2011		2012		2013		2014		2015		2016		2017
2008	$	20,005	$	32,555	$	36,782	$	38,925	$	39,511	$	40,210	$	40,309	$	40,323	$	40,347	$	40,404
2009				23,306		37,621		44,689		47,967		49,287		49,539		49,704		49,853		49,957
2010						38,643		67,755		75,199		82,624		83,511		84,111		84,556		84,717
2011								46,416		67,939		83,497		85,533		86,217		86,593		86,660
2012										37,860		64,278		68,849		70,807		71,995		72,055
2013												45,901		54,514		58,047		59,775		60,277
2014														2,515		4,418		5,631		6,428
2015																11,570		22,281		24,262
2016																		21,669		30,646
2017																				15,776
																		Total	$	471,182
						All outstanding liabilities before 2008, net of reinsurance														(3)
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	11,505

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):

		2017		2016
Net outstanding liabilities for losses and LAE
Specialty Commercial Segment	$	275,436	$	252,602
Standard Commercial Segment		78,119		82,222
Personal Segment		11,505		15,544
Liabilities for unpaid losses and allocated loss adjustment expenses, net of reinsurance		365,060		350,368
Reinsurance recoverable on unpaid losses and LAE
Specialty Commercial Segment		137,975		102,597
Standard Commercial Segment		6,051		8,540
Personal Segment		10,586		12,100
Total reinsurance recoverable on unpaid losses and LAE		154,612		123,237
Unallocated loss adjustment expenses
Specialty Commercial Segment		3,377		3,831
Standard Commercial Segment		3,153		3,031
Personal Segment		898		1,100
Total unallocated loss adjustment expenses		7,428		7,962
Total reserves for unpaid losses and loss adjustment expenses	$	527,100	$	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, 2017:

	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	30.5%	23.9%	19.0%	13.1%	6.6%	1.6%	1.5%	1.8%	0.7%	1.3%
Standard Commercial Segment	45.1%	23.7%	8.1%	6.5%	4.7%	3.7%	1.5%	1.8%	1.0%	1.7%
Personal Segment	52.0%	28.6%	10.8%	5.6%	1.3%	0.7%	0.3%	0.2%	0.1%	0.4%

(

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