Loss Reserves (Tables)

3 Months Ended

Mar. 31, 2018

Reconciliation of beginning and ending loss reserves

Table 12.1 provides a reconciliation of beginning and ending loss reserves as of and for the three months ended March 31, 2018 and 2017.



	Table	12.1
Development of reserves for losses and loss adjustment expenses			Three Months Ended March 31,
	(In thousands)		2018			2017
	Reserve at beginning of period		$	985,635		$	1,438,813
	Less reinsurance recoverable		48,474			50,493
	Net reserve at beginning of period		937,161			1,388,320

	Losses incurred:
	Losses and LAE incurred in respect of delinquency notices received in:
	Current year		59,070			80,416
	Prior years ⁽¹⁾		(35,220		)	(52,797		)
	Total losses incurred		23,850			27,619

	Losses paid:
	Losses and LAE paid in respect of delinquency notices received in:
	Current year		95			331
	Prior years		81,983			127,224
	Reinsurance terminations		236			—
	Total losses paid		82,314			127,555
	Net reserve at end of period		878,697			1,288,384
	Plus reinsurance recoverables		45,474			46,658
	Reserve at end of period		$	924,171		$	1,335,042


⁽¹⁾	A negative number for prior year losses incurred indicates a redundancy of prior year loss reserves. See the following table for more information about prior year loss development.

Prior year development of the reserves

The prior year development of the reserves in the first three months of 2018 and 2017 is reflected in table 12.2 below.



	Table	12.2
Reserve development on previously received delinquencies			Three Months Ended March 31,
	(in millions)		2018			2017
	Decrease in estimated claim rate on primary defaults		$	(47	)	$	(54	)
	Increase in estimated severity on primary defaults		16			4
	Change in estimates related to pool reserves, LAE reserves and reinsurance		(4		)	(3		)
	Total prior year loss development ⁽¹⁾		$	(35	)	$	(53	)


⁽¹⁾	A negative number for prior year loss development indicates a redundancy of prior year loss reserves.

Rollforward of primary delinquent inventory

A rollforward of our primary delinquent inventory for the three months ended March 31, 2018 and 2017 appears in table 12.3 below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the accuracy of the data provided by servicers, the number of business days in a month, transfers of servicing between loan servicers and whether all servicers have provided the reports in a given month.



	Table	12.3
Delinquent inventory rollforward			Three Months Ended March 31,
			2018		2017
	Delinquent inventory at beginning of period		46,556		50,282
	New notices		14,623		14,939
	Cures		(18,073	)	(17,128	)
	Paids (including those charged to a deductible or captive)		(1,571	)	(2,635	)
	Rescissions and denials		(68	)	(95	)
	Other items removed from inventory		(224	)	(14	)
	Delinquent inventory at end of period		41,243		45,349

Aging of the primary delinquent inventory

Table 12.4 below shows the number of consecutive months a borrower is delinquent.



	Table	12.4
Delinquent inventory - consecutive months in default			March 31, 2018			December 31, 2017			March 31, 2017
	3 months or less		8,770	21	%	17,119	37	%	9,184	20	%
	4-11 months		16,429	40	%	12,050	26	%	13,617	30	%
	12 months or more ^{(1) (2)}		16,044	39	%	17,387	37	%	22,548	50	%
	Total primary delinquent inventory		41,243	100	%	46,556	100	%	45,349	100	%

	Primary claims received inventory included in ending delinquent inventory:		819	2	%	954	2	%	1,390	3	%


⁽¹⁾	Approximately 44%, 45%, and 48% of the primary delinquent inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of March 31, 2018, December 31, 2017, and March 31, 2017, respectively.


⁽²⁾	The majority of items removed from our delinquent inventory were due to commutations of NPLs during the three months ended March 31, 2018 were delinquent for 12 consecutive months or more as of December 31, 2017.

Number of payments delinquent

Table 12.5 below shows the number of payments that a borrower is delinquent.



	Table	12.5
Delinquent inventory - number of payments delinquent			March 31, 2018			December 31, 2017			March 31, 2017
	3 payments or less		16,023	39	%	21,678	46	%	15,692	35	%
	4-11 payments		13,734	33	%	12,446	27	%	12,275	27	%
	12 payments or more ^{(1) (2)}		11,486	28	%	12,432	27	%	17,382	38	%
	Total primary delinquent inventory		41,243	100	%	46,556	100	%	45,349	100	%


⁽¹⁾	Approximately 42%, 43%, and 45% of the primary delinquent inventory with 12 payments or more delinquent has at least 36 payments delinquent as of March 31, 2018, December 31, 2017, and March 31, 2017, respectively.


⁽²⁾	The majority of items removed from our delinquent inventory were due to commutations of NPLs during the three months ended March 31, 2018 had 12 or more payments delinquent as of December 31, 2017.