Reserves for Unpaid Losses and Loss Adjustment Expenses

6 Months Ended

Jun. 30, 2019

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,
	2019		2018
Balance at January 1	$	527,247		527,100
Less reinsurance recoverable		221,716		154,612
Net balance at January 1		305,531		372,488
Incurred related to:
Current year		141,909		122,870
Prior years		1,404		4,453
Total incurred		143,313		127,323
Paid related to:
Current year		38,563		28,321
Prior years		107,899		140,339
Total paid		146,462		168,660
Net balance at June 30		302,382		331,151
Plus reinsurance recoverable		249,161		189,401
Balance at June 30	$	551,543	$	520,552

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

	June 30,
	2019		2018
Specialty Commercial Segment	$	5,203	$	6,861
Standard Commercial Segment		(3,583)		(1,560)
Personal Segment		(216)		(848)
Corporate		—		—
Total (favorable) net prior year development	$	1,404	$	4,453

The following describes the primary factors behind each segment’s prior accident year reserve development for the six months ended June 30, 2019 and 2018:

Six months ended June 30, 2019:

· Specialty Commercial Segment. Our Commercial Auto business unit experienced net unfavorable development in the 2017 and prior accident years primarily in the primary commercial auto liability line of business, partially offset by net favorable development in the primary commercial auto line of business in the 2018 accident year. Our E&S Casualty business unit experienced net unfavorable development primarily in our E&S package insurance products in the 2017 and prior accident years, partially offset by net favorable development in the 2018 accident year. We experienced net favorable development in our E&S Property and Professional Liability business units, partially offset by net unfavorable development in our Aerospace & Programs business unit.

· Standard Commercial Segment. Our Commercial Accounts business unit experienced net favorable development in the 2018, 2017, 2014 and 2012 and prior accident years primarily in the general liability line of business, partially offset by net unfavorable development primarily in the general liability line of business in the 2016 and 2015 accident years. Our Commercial Accounts business unit experienced net favorable development in the 2017 and 2015 accident years in the occupational accident line of business, partially offset by net unfavorable development in the 2016 accident year. The run-off from our former Workers Compensation operating unit experienced net favorable development in the 2015 and 2012 and prior accident years.

· Personal Segment. Net favorable development in our Specialty Personal Lines business unit was mostly attributable to the 2018, 2017, 2015, 2013 and prior accident years, partially offset by unfavorable development in the 2016 and 2014 accident years.

Six months ended June 30, 2018:

· Specialty Commercial Segment. Our Commercial Auto business 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 liability line of business in the 2017 accident year. We experienced net unfavorable development in our E&S Property, Professional Liability, E&S Casualty and Aerospace& Programs business units.

· Standard Commercial Segment. Our Commercial Accounts business 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.