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Loss Reserves (Tables)
 6 Months Ended
Jun. 30, 2018
Insurance Loss Reserves [Abstract]  
Reconciliation of beginning and ending loss reserves
Table 12.1 provides a reconciliation of beginning and ending loss reserves as of and for the six months ended June 30, 2018 and 2017.
 
Table
12.1
 
 
 
 
Development of reserves for losses and loss adjustment expenses
 
 
 
Six months ended June 30,
(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
 
108,361

 
158,906

 
Prior years (1)
 
(97,966
)
 
(103,948
)
 
Total losses incurred
 
10,395

 
54,958

 
 
 
 
 
 
 
Losses paid:
 
 
 
 
 
Losses and LAE paid in respect of delinquency notices received in:
 
 
 
 
 
Current year
 
263

 
2,125

 
Prior years
 
173,313

 
298,847

 
Reinsurance terminations
 
(1,984
)
 
—

 
Total losses paid
 
171,592

 
300,972

 
Net reserve at end of period
 
775,964

 
1,142,306

 
Plus reinsurance recoverables
 
37,051

 
44,783

 
Reserve at end of period
 
$
813,015

 
$
1,187,089

(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 six months of 2018 and 2017 is reflected in table 12.2 below.
 
Table
12.2
 
 
 
 
Reserve development on previously received delinquencies
 
 
 
Six months ended June 30,
(in millions)
 
2018
 
2017
Decrease in estimated claim rate on primary defaults
 
$
(120
)
 
$
(104
)
Increase in estimated severity on primary defaults
 
19

 
2

 
Change in estimates related to pool reserves, LAE reserves and reinsurance
 
3

 
(2
)
 
Total prior year loss development (1)
 
$
(98
)
 
$
(104
)
(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 and six months ended June 30, 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 June 30,
 
Six Months Ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Delinquent inventory at beginning of period
 
41,243

 
45,349

 
46,556

 
50,282

 
New notices
 
12,159

 
14,463

 
26,782

 
29,402

 
Cures
 
(15,350
)
 
(14,708
)
 
(33,423
)
 
(31,836
)
 
Paids (including those charged to a deductible or captive)
 
(1,501
)
 
(2,573
)
 
(3,072
)
 
(5,208
)
 
Rescissions and denials
 
(76
)
 
(100
)
 
(144
)
 
(195
)
 
Other items removed from inventory
 
(438
)
 
(1,114
)
 
(662
)
 
(1,128
)
 
Delinquent inventory at end of period
 
36,037

 
41,317

 
36,037

 
41,317
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
 
June 30, 2018
 
December 31, 2017
 
June 30, 2017
3 months or less
8,554

 
24
%
 
17,119

 
37
%
 
10,299

 
25
%
4-11 months
12,506

 
35
%
 
12,050

 
26
%
 
11,018

 
27
%
 
12 months or more (1) (2)
14,977

 
41
%
 
17,387

 
37
%
 
20,000

 
48
%
 
Total primary delinquent inventory
36,037

 
100
%
 
46,556

 
100
%
 
41,317

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Primary claims received inventory included in ending delinquent inventory:
827

 
2
%
 
954

 
2
%
 
1,258

 
3
%
(1) 
Approximately 43%, 45%, and 46% of the primary delinquent inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of June 30, 2018, December 31, 2017, and June 30, 2017, respectively.
(2) 
The majority of items removed from our delinquent inventory due to commutations of NPLs during the six months ended June 30, 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
 
June 30, 2018
 
December 31, 2017
 
June 30, 2017
3 payments or less
14,178

 
39
%
 
21,678

 
46
%
 
15,858

 
38
%
4-11 payments
11,429

 
32
%
 
12,446

 
27
%
 
10,560

 
26
%
12 payments or more (1) (2)
10,430

 
29
%
 
12,432

 
27
%
 
14,899

 
36
%
 
Total primary delinquent inventory
36,037

 
100
%
 
46,556

 
100
%
 
41,317

 
100
%

(1) 
Approximately 41%, 43%, and 44% of the primary delinquent inventory with 12 payments or more delinquent has at least 36 payments delinquent as of June 30, 2018, December 31, 2017, and June 30, 2017, respectively.
(2) 
The majority of items removed from our delinquent inventory due to commutations of NPLs during the six months ended June 30, 2018 had 12 or more payments delinquent as of December 31, 2017.