XML 37 R13.htm IDEA: XBRL DOCUMENT v3.6.0.2
Property and Casualty Insurance Reserves
12 Months Ended
Dec. 31, 2016
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]  
Property and Casualty Insurance Reserves
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES
The Company’s Property and Casualty Insurance Reserves are reported using the Company’s estimate of its ultimate liability for losses and LAE for claims that occurred prior to the end of any given accounting period but have not yet been paid. Such estimates are based on individual case estimates for reported claims and estimates for IBNR losses, including expected development on reported claims.
The determination of individual case reserves differs by line of business. For preferred personal automobile insurance, homeowners insurance and other personal insurance, case reserves are set by adjusters and are based on the adjusters’ estimates of the amount for which the claims will ultimately be paid. For non-standard personal automobile insurance and commercial automobile insurance, case reserves are set primarily using statistical reserves that are based on studies of historical average paid amounts by state, coverage and product. However, when such reserves exceed certain thresholds they are set manually by adjusters.
The Company’s actuaries generally estimate ultimate losses and LAE and, therefore, reserves at least quarterly for most product lines and/or coverage levels using accident quarters spanning 10 or more years, depending on the size of the product line and/or coverage level or emerging issues relating to them. The Company’s actuaries use a variety of generally accepted actuarial loss reserving estimation methodologies to estimate the ultimate losses and LAE for the current accident quarter and re-estimate the ultimate losses and LAE for previous accident quarters to determine if changes in the previous estimates of the ultimate losses and LAE are indicated by the most recent data.
The key assumption in these estimation methodologies is that patterns observed in prior periods are indicative of how losses and LAE are expected to develop in the future and that such historical data can be used to predict and estimate ultimate losses and LAE. However, changes in the Company’s business processes, by their very nature, are likely to affect the development patterns, which generally results in the historical development factors becoming less reliable over time in predicting how losses and LAE will ultimately develop. The Company’s actuaries use professional judgment in determining how much weight to place on the development patterns based on the older historical data and how much weight to place on the development patterns based on more recent data. In some cases, the Company’s actuaries make adjustments to the loss reserving estimation methodologies to estimate ultimate losses and LAE.
The Company’s actuaries’ quarterly selections are summed by product and/or coverage levels to create the actuarial indication of the ultimate losses and LAE. Paid amounts are then subtracted from the ultimates to compute the reserves for property and casualty insurance losses and LAE. These results are reviewed by the Company’s corporate actuary and corporate management who apply their collective judgment and determine the appropriate estimated level of reserves to record. Numerous factors are considered in this determination process, including, but not limited to, the assessed reliability of key loss trends and assumptions that may be significantly influencing the current actuarial indications, changes in claim handling practices or other changes that affect the timing of payment or development patterns, changes in the mix of business, the maturity of the accident year, pertinent trends observed over the recent past, the level of volatility within a particular line of business, the improvement or deterioration of actuarial indications in the current period as compared to prior periods, and the amount of reserves related to third party pools for which the Company does not have access to the underlying data and, accordingly, relies on calculations provided by such pools.
The Company’s goal is to ensure that its total reserves for property and casualty insurance losses and LAE are adequate to cover all costs, while sustaining minimal variation from the time reserves for losses and LAE are initially estimated until losses and
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued)
LAE are fully developed. Changes in the Company’s estimates of these losses and LAE over time, also referred to as “development,” will occur and may be material.
The following tables contain information about incurred and paid claims development as of and for the year December 31, 2016, net of reinsurance and indemnification, as well as cumulative claim frequency and the total of IBNR liabilities, including expected development on reported claims included within the net incurred losses and allocated LAE amounts. The tables are grouped by major product line and, if relevant, coverage. The information about incurred and paid claims development for the years ended December 31, 2012 through 2015 is presented as supplementary information and is unaudited.
Preferred Personal Automobile Insurance—Liability
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS
 
As of December 31, 2016
 
 
Incurred Losses and Allocated LAE, Net of Reinsurance
For the Years Ended December 31,
 
Total of IBNR Liabilities Plus Expected Development on Reported Claims
 
Cumulative Number of Incurred Claims
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
2012
 
$
305.0

 
$
290.9

 
$
284.4

 
$
282.2

 
$
282.1

 
$
0.8

 
56,772

2013
 
265.4

 
251.1

 
250.1

 
251.6

 

 
51,126

2014
 
202.1

 
198.3

 
200.2

 
0.9

 
39,865

2015
 
168.3

 
171.8

 
6.3

 
32,484

2016
 
162.1

 
26.9

 
30,278

Total
 
1,067.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Paid Losses and Allocated LAE, Net of Reinsurance
 
 
 
 
 
 
For the Years Ended December 31,
 
 
 
 
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
 
 
2012
 
$
117.8

 
$
207.6

 
$
245.5

 
$
264.3

 
$
272.9

 
 
 
 
2013
 
107.2

 
182.2

 
216.3

 
234.1

 
 
 
 
2014
 
85.8

 
143.3

 
168.8

 
 
 
 
2015
 
73.1

 
122.4

 
 
 
 
2016
 
61.2

 
 
 
 
Total
 
859.4

 
 
 
 
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2012, Net of Reinsurance
 
10.9

 
 
 
 
Loss and Allocated LAE Reserves, Net of Reinsurance
 
$
219.3

 
 
 
 
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued)
Preferred Personal Automobile Insurance—Physical Damage
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS
 
As of December 31, 2016
 
 
Incurred Losses and Allocated LAE, Net of Reinsurance
For the Years Ended December 31,
 
Total of IBNR Liabilities Plus Expected Development on Reported Claims
 
Cumulative Number of Incurred Claims
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
2012
 
$
163.9

 
$
163.9

 
$
164.1

 
$
164.2

 
$
164.3

 
$
(0.1
)
 
89,703

2013
 
139.7

 
138.5

 
138.5

 
138.4

 
(0.1
)
 
78,779

2014
 
122.0

 
121.6

 
121.4

 
(0.1
)
 
67,205

2015
 
101.2

 
100.7

 
(0.4
)
 
53,419

2016
 
106.6

 
(4.2
)
 
49,267

Total
 
631.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Paid Losses and Allocated LAE, Net of Reinsurance
 
 
 
 
 
 
For the Years Ended December 31,
 
 
 
 
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
 
 
2012
 
$
160.5

 
$
164.4

 
$
164.2

 
$
164.2

 
$
164.3

 
 
 
 
2013
 
137.0

 
138.9

 
138.6

 
138.5

 
 
 
 
2014
 
121.0

 
121.8

 
121.5

 
 
 
 
2015
 
100.1

 
101.0

 
 
 
 
2016
 
105.2

 
 
 
 
Total
 
630.5

 
 
 
 
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2012, Net of Reinsurance
 
(0.1
)
 
 
 
 
Loss and Allocated LAE Reserves, Net of Reinsurance
 
$
0.8

 
 
 
 
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued)
Non-standard Personal Automobile Insurance—Liability1 
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS
 
As of December 31, 2016
 
 
Incurred Losses and Allocated LAE, Net of Reinsurance and Indemnification
For the Years Ended December 31,
 
Total of IBNR Liabilities Plus Expected Development on Reported Claims
 
Cumulative Number of Incurred Claims
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
2012
 
$
243.0

 
$
242.1

 
$
242.0

 
$
243.0

 
$
244.0

 
$
0.2

 
63,019

2013
 
250.5

 
247.1

 
248.3

 
249.5

 
0.5

 
67,058

2014
 
255.0

 
262.9

 
267.1

 
5.4

 
76,846

2015
 
379.4

 
379.8

 
10.4

 
91,832

2016
 
435.7

 
72.2

 
108,062

Total
 
1,576.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Paid Losses and Allocated LAE, Net of Reinsurance and Indemnification
 
 
 
 
 
 
For the Years Ended December 31,
 
 
 
 
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
 
 
2012
 
$
112.8

 
$
202.6

 
$
228.9

 
$
238.9

 
$
242.6

 
 
 
 
2013
 
117.8

 
208.2

 
233.8

 
244.2

 
 
 
 
2014
 
117.4

 
210.8

 
245.5

 
 
 
 
2015
 
167.7

 
304.7

 
 
 
 
2016
 
168.9

 
 
 
 
Total
 
1,205.9

 
 
 
 
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2012, Net of Reinsurance and Indemnification
 
1.5

 
 
 
 
Loss and Allocated LAE Reserves, Net of Reinsurance and Indemnification
 
$
371.7

 
 
 
 
 
 
 
 
 
1 Table retrospectively includes Alliance United’s historical incurred and paid accident year claim information for all periods presented.
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued)
Non-standard Personal Automobile Insurance—Physical Damage1 
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS
 
As of December 31, 2016
 
 
Incurred Losses and Allocated LAE, Net of Reinsurance and Indemnification
For the Years Ended December 31,
 
Total of IBNR Liabilities Plus Expected Development on Reported Claims
 
Cumulative Number of Incurred Claims
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
2012
 
$
96.4

 
$
98.1

 
$
98.4

 
$
98.3

 
$
98.2

 
$

 
35,840

2013
 
100.1

 
100.3

 
100.0

 
99.8

 
(0.1
)
 
36,179

2014
 
105.8

 
104.7

 
104.3

 
(0.7
)
 
38,042

2015
 
143.2

 
143.3

 
(1.6
)
 
42,863

2016
 
177.9

 
(4.0
)
 
52,039

Total
 
623.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Paid Losses and Allocated LAE, Net of Reinsurance and Indemnification
 
 
 
 
 
 
For the Years Ended December 31,
 
 
 
 
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
 
 
2012
 
$
91.2

 
$
98.3

 
$
98.2

 
$
98.2

 
$
98.2

 
 
 
 
2013
 
93.4

 
100.2

 
99.9

 
99.7

 
 
 
 
2014
 
97.1

 
105.9

 
105.1

 
 
 
 
2015
 
130.0

 
143.8

 
 
 
 
2016
 
167.4

 
 
 
 
Total
 
614.2

 
 
 
 
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2012, Net of Reinsurance and Indemnification
 

 
 
 
 
Loss and Allocated LAE Reserves, Net of Reinsurance and Indemnification
 
$
9.3

 
 
 
 
 
 
 
 
 
1 Table retrospectively includes Alliance United’s historical incurred and paid accident year claim information for all periods presented.

NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued)
Homeowners Insurance
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS
 
As of December 31, 2016
 
 
Incurred Losses and Allocated LAE, Net of Reinsurance
For the Years Ended December 31,
 
Total of IBNR Liabilities Plus Expected Development on Reported Claims
 
Cumulative Number of Incurred Claims
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
2012
 
$
250.2

 
$
235.9

 
$
231.0

 
$
227.5

 
$
226.7

 
$
0.1

 
27,833

2013
 
180.8

 
172.8

 
169.4

 
167.5

 
(0.1
)
 
21,976

2014
 
211.1

 
208.5

 
205.0

 
(0.1
)
 
22,432

2015
 
178.9

 
164.9

 
(1.8
)
 
17,432

2016
 
200.3

 
9.7

 
16,769

Total
 
964.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Paid Losses and Allocated LAE, Net of Reinsurance
 
 
 
 
 
 
For the Years Ended December 31,
 
 
 
 
Accident Year
 
2012
(Unaudited)
 
2013
(Unaudited)
 
2014
(Unaudited)
 
2015
(Unaudited)
 
2016
 
 
 
 
2012
 
$
165.9

 
$
216.0

 
$
222.3

 
$
225.2

 
$
225.8

 
 
 
 
2013
 
122.4

 
156.5

 
162.5

 
164.7

 
 
 
 
2014
 
149.2

 
194.4

 
200.1

 
 
 
 
2015
 
116.9

 
154.4

 
 
 
 
2016
 
141.2

 
 
 
 
Total
 
886.2

 
 
 
 
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2012, Net of Reinsurance
 
3.5

 
 
 
 
Loss and Allocated LAE Reserves, Net of Reinsurance
 
$
81.7

 
 
 
 

The claim counts in the preceding tables are cumulative incurred claim counts as of December 31, 2016 and are equal to both (i) reported claims minus claims closed without payment as well as (ii) open claims plus claims closed with payment. As such, the difference between these claim counts and final claim counts once all claims have been identified and settled will tend to be higher in recent accident years, particularly the most recent accident year, due to claims closed without payment. Certain product lines, particularly the Company’s non-standard personal automobile insurance, tend to have a higher percentage of claims closed without payment.
The Company's claims are counted at the feature level. As such, each claimant and each coverage is counted separately. For example, if for one occurrence, the Company's policyholder is at fault for damage to his/her own vehicle, another party's vehicle and three injured parties, there may be five features—three for bodily injury liability, one for property damage liability and one for first-party collision coverage. There may also be another feature for first-party medical payments.
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued)
The following table reconciles the net incurred and paid claims development tables presented above to the Company's liability for Property and Casualty Insurance Reserves included in the Consolidated Balance Sheet at December 31, 2016.
DOLLARS IN MILLIONS
 
2016
Property and Casualty Insurance Reserves, Net of Reinsurance and Indemnification:
 
 
Preferred Personal Automobile Insurance—Liability
 
$
219.3

Preferred Personal Automobile Insurance—Physical Damage
 
0.8

Non-standard Personal Automobile Insurance—Liability
 
371.7

Non-standard Personal Automobile Insurance—Physical Damage
 
9.3

Homeowners Insurance
 
81.7

Other
 
124.7

Total
 
807.5

Reinsurance and Indemnification Recoverables on Unpaid Losses and Allocated LAE:
 
 
Preferred Personal Automobile Insurance—Liability
 
28.3

Preferred Personal Automobile Insurance—Physical Damage
 

Non-standard Personal Automobile Insurance—Liability
 
10.6

Non-standard Personal Automobile Insurance—Physical Damage
 
(0.6
)
Homeowners Insurance
 

Other
 
8.7

Total
 
47.0

Insurance Lines other than Short-duration
 

Unallocated LAE
 
76.9

Property and Casualty Insurance Reserves, Gross of Reinsurance and Indemnification
 
$
931.4


The following is supplementary information about average historical claims duration as of December 31, 2016.
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance and Indemnification (Unaudited)
Years
 
1
 
2
 
3
 
4
 
5
Preferred Personal Automobile Insurance—Liability
 
41.5
%
 
72.2
%
 
85.8
%
 
93.4
%
 
96.7
%
Preferred Personal Automobile Insurance—Physical Damage
 
98.9
%
 
100.3
%
 
100.1
%
 
100.0
%
 
100.0
%
Non-standard Personal Automobile Insurance—Liability
 
44.1
%
 
81.4
%
 
93.1
%
 
97.9
%
 
99.4
%
Non-standard Personal Automobile Insurance—Physical Damage
 
92.9
%
 
100.6
%
 
100.3
%
 
99.9
%
 
100.0
%
Homeowners Insurance
 
72.1
%
 
94.3
%
 
97.6
%
 
98.8
%
 
99.6
%
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued)
Property and Casualty Insurance Reserve activity for the years ended December 31, 2016, 2015 and 2014 was:
DOLLARS IN MILLIONS
 
2016
 
2015
 
2014
Beginning Property and Casualty Insurance Reserves:
 
 
 
 
 
 
Gross of Reinsurance and Indemnification at Beginning of Year
 
$
862.8

 
$
733.9

 
$
843.5

Less Reinsurance Recoverables and Indemnification at Beginning of Year
 
52.0

 
54.9

 
63.4

Property and Casualty Insurance Reserves, Net of Reinsurance and Indemnification at Beginning of Year
 
810.8

 
679.0

 
780.1

Property and Casualty Insurance Reserves Acquired, Net of Reinsurance and Indemnification
 

 
125.4

 

Incurred Losses and LAE related to:
 
 
 
 
 
 
Current Year:
 
 
 
 
 
 
Continuing Operations
 
1,358.6

 
1,123.3

 
965.4

Prior Years:
 
 
 
 
 
 
Continuing Operations
 
(14.4
)
 
(11.5
)
 
(53.5
)
Discontinued Operations
 
(6.3
)
 
(8.6
)
 
(3.6
)
Total Incurred Losses and LAE related to Prior Years
 
(20.7
)
 
(20.1
)
 
(57.1
)
Total Incurred Losses and LAE
 
1,337.9

 
1,103.2

 
908.3

Paid Losses and LAE related to:
 
 
 
 
 
 
Current Year:
 
 
 
 
 
 
Continuing Operations
 
831.0

 
723.2

 
639.8

Prior Years:
 
 
 
 
 
 
Continuing Operations
 
431.9

 
366.2

 
360.4

Discontinued Operations
 
4.6

 
7.4

 
9.2

Total Paid Losses and LAE related to Prior Years
 
436.5

 
373.6

 
369.6

Total Paid Losses and LAE
 
1,267.5

 
1,096.8

 
1,009.4

Property and Casualty Insurance Reserves, Net of Reinsurance and Indemnification at End of Year
 
881.2

 
810.8

 
679.0

Plus Reinsurance and Indemnification Recoverables at End of Year
 
50.2

 
52.0

 
54.9

Property and Casualty Insurance Reserves, Gross of Reinsurance and Indemnification at End of Year
 
$
931.4

 
$
862.8

 
$
733.9


Property and Casualty Insurance Reserves are estimated based on historical experience patterns and current economic trends. Actual loss experience and loss trends are likely to differ from these historical experience patterns and economic conditions. Loss experience and loss trends emerge over several years from the dates of loss inception. The Company monitors such emerging loss trends on a quarterly basis. Changes in such estimates are included in the Consolidated Statements of Income in the period of change.
In 2016, the Company reduced its property and casualty insurance reserves by $20.7 million to recognize favorable development of loss and LAE reserves from prior accident years. Personal lines insurance loss and LAE reserves developed favorably by $16.8 million, and commercial lines insurance loss and LAE reserves developed favorably by $3.9 million. Personal automobile insurance loss and LAE reserves developed adversely by $11.3 million due primarily to the emergence of loss patterns that were worse than expected for liability insurance for the 2015 and 2014 accident years and, to a lesser extent, the 2013 and 2012 accident years. Homeowners insurance loss and LAE reserves developed favorably by $20.0 million due primarily to $16.8 million of favorable development on catastrophes primarily for the 2015 accident year and, to a lesser extent, the 2014 accident year. Other personal lines loss and LAE reserves developed favorably by $8.1 million due primarily to the emergence of more favorable loss patterns than expected for the 2015, 2014, 2013 and 2012 accident years. Commercial lines insurance loss and LAE reserves included adverse development of $2.4 million from continuing operations and favorable development of $6.3 million from discontinued operations.
In 2015, the Company reduced its property and casualty insurance reserves by $20.1 million to recognize favorable development of losses and LAE from prior accident years, including the impact of adverse development of $7.7 million, net of estimated indemnification recoveries, related to Alliance United for periods prior to the date of its acquisition. Personal lines
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued)
insurance loss and LAE reserves developed favorably by $13.3 million and commercial lines insurance loss and LAE reserves developed favorably by $6.8 million. Personal automobile insurance loss and LAE reserves developed favorably by $1.8 million, net of the adverse development related to Alliance United, homeowners insurance loss and LAE reserves developed favorably by $10.8 million, and other personal lines loss and LAE reserves developed favorably by $0.7 million. Excluding the adverse development related to Alliance United for periods prior to the date of its acquisition, personal lines insurance losses and LAE reserves developed favorably by $21.0 million due primarily to the emergence of more favorable loss patterns than expected for the 2013, 2012 and 2011 accident years. Commercial lines insurance loss and LAE reserves included adverse development of $1.8 million from continuing operations and favorable development of $8.6 million from discontinued operations.
In 2014, the Company reduced its property and casualty insurance reserves by $57.1 million to recognize favorable development of losses and LAE from prior accident years. Personal lines insurance loss and LAE reserves developed favorably by $50.9 million and commercial lines insurance loss and LAE reserves developed favorably by $6.2 million. Personal automobile insurance loss and LAE reserves developed favorably by $31.6 million, homeowners insurance loss and LAE reserves developed favorably by $14.8 million, and other personal lines loss and LAE reserves developed favorably by $4.5 million. The personal lines insurance losses and LAE reserves developed favorably due primarily to the emergence of more favorable loss patterns than expected for the three most recent prior accident years. Commercial lines insurance loss and LAE reserves included favorable development of $2.6 million from continuing operations and $3.6 million from discontinued operations. Commercial lines insurance losses and LAE reserves developed favorably from continuing operations due primarily to the emergence of more favorable loss patterns than expected for the 2013, 2011 and 2010 accident years.
The Company cannot predict whether loss and LAE reserves will develop favorably or unfavorably from the amounts reported in the Consolidated Financial Statements. The Company believes that any such development will not have a material effect on the Company’s consolidated financial position, but could have a material effect on the Company’s consolidated financial results for a given period.
Reinsurance and indemnification recoverables on property and casualty insurance reserves were $50.2 million and $52.0 million at December 31, 2016 and 2015, respectively. These recoverables are concentrated with several reinsurers, the vast majority of which are highly rated by one or more of the principal investor and/or insurance company rating agencies. While most of these recoverables were unsecured at December 31, 2016 and 2015, the agreements with the reinsurers generally provide for some form of collateralization upon the occurrence of certain events.