Reserves for Unpaid Losses and Loss Adjustment Expenses

6 Months Ended

Jun. 30, 2018

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,
		2018		2017
Balance at January 1	$	527,100	$	481,567
Less reinsurance recoverable		154,612		123,237
Net balance at January 1		372,488		358,330
Incurred related to:
Current year		122,870		122,862
Prior years		4,453		9,684
Total incurred		127,323		132,546
Paid related to:
Current year		28,321		33,687
Prior years		140,339		90,042
Total paid		168,660		123,729
Net balance at June 30		331,151		367,147
Plus reinsurance recoverable		189,401		138,211
Balance at June 30	$	520,552	$	505,358

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

		Six Months Ended June 30,
		2018		2017
Specialty Commercial Segment	$	6,861	$	8,332
Standard Commercial Segment		(1,560)		264
Personal Segment		(848)		1,088
Corporate		-		-
Total unfavorable (favorable) net prior years' development	$	4,453	$	9,684

The following describes the primary factors behind each segment’s prior accident year reserve development for the six months ended June 30, 2018 and 2017:

Six months ended June 30, 2018:

· Specialty Commercial Segment. Our Contract Binding operating unit experienced net unfavorable development in the 2016 and prior accident years primarily in the commercial auto liability line of business, partially offset by favorable development primarily in the commercial auto and general liability lines of business in the 2017 accident year. Our Specialty Commercial operating unit experienced net unfavorable development in general aviation, commercial excess liability, satellite launch insurance products, primary/excess commercial property, professional liability and specialty risk programs lines of business.

· Standard Commercial Segment. Our Standard Commercial P&C operating unit experienced net favorable development in the 2016 and prior accident years primarily in the general liability line of business, partially offset by net unfavorable development primarily in the commercial property line of business in the 2017 accident year and net unfavorable development in the 2017 and prior accident years in the occupational accident line of business.  

· Personal Segment.  Net favorable development in our Specialty Personal Lines operating unit was mostly attributable to the 2013 through 2017 accident years, partially offset by unfavorable development in the 2012 and prior accident years.

Six months ended June 30, 2017: 

· Specialty Commercial Segment.Our Contract Binding operating unit experienced net 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 the medical professional liability lines of business primarily in the 2016 accident year.

· 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.