Loss Reserves (Tables)

6 Months Ended

Jun. 30, 2022

Reconciliation of beginning and ending loss reserves

Table 11.1 provides a reconciliation of beginning and ending loss reserves as of and for the six months ended June 30, 2022 and 2021.


Development of reserves for losses and loss adjustment expenses
Table	11.1
		Six Months Ended June 30,
(In thousands)		2022		2021
Reserve at beginning of period		$	883,522	$	880,537
Less reinsurance recoverable		66,905		95,042
Net reserve at beginning of period		816,617		785,495

Losses incurred:
Losses and LAE incurred in respect of delinquency notices received in:
Current year		68,210		67,068
Prior years (1)		(186,582)		1,732
Total losses incurred		(118,372)		68,800

Losses paid:
Losses and LAE paid in respect of delinquency notices received in:
Current year		116		48
Prior years		24,909		29,164

Total losses paid		25,025		29,212
Net reserve at end of period		673,220		825,083
Plus reinsurance recoverable		53,958		111,153
Reserve at end of period		$	727,178	$	936,236

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

Prior year development of the reserves

The prior year loss reserve development for the six months of June 30, 2022 and 2021 is reflected in table 11.2 below.


Reserve development on previously received delinquencies
Table	11.2
		Six Months Ended June 30,
(In thousands)		2022		2021
Increase (decrease) in estimated claim rate on primary defaults		$	(186,163)	$	(356)
Increase (decrease) in estimated severity on primary defaults		(9,945)		512
Change in estimates related to pool reserves, LAE reserves, reinsurance, and other		9,526		1,576
Total prior year loss development (1)		$	(186,582)	$	1,732

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

Rollforward of primary delinquent inventory

A rollforward of our primary delinquency inventory for the three and six months ended June 30, 2022 and 2021 appears in table 11.3 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 number of business days in a month and transfers of servicing between loan servicers.


Delinquency inventory rollforward
Table	11.3
		Three Months Ended June 30,		Six Months Ended June 30,
		2022	2021	2022	2021
Delinquency inventory at beginning of period		30,462	52,775	33,290	57,710
New notices		9,396	9,036	20,099	22,047
Cures		(12,677)	(18,460)	(25,877)	(36,088)
Paid claims		(319)	(346)	(641)	(658)
Rescissions and denials		(7)	(6)	(16)	(12)

Delinquency inventory at end of period		26,855	42,999	26,855	42,999

Aging of the primary delinquent inventory

Table 11.4 below shows the number of consecutive months a borrower is delinquent. Historically as a delinquency ages it is more likely to result in a claim.


Primary delinquency inventory - consecutive months delinquent
Table	11.4
		June 30, 2022		December 31, 2021		June 30, 2021
3 months or less		6,791		7,586		6,513
4-11 months		7,946		7,990		12,840
12 months or more (1)		12,118		17,714		23,646
Total		26,855		33,290		42,999
3 months or less		25	%	23	%	15	%
4-11 months		30	%	24	%	30	%
12 months or more		45	%	53	%	55	%
Total		100	%	100	%	100	%
Primary claims received inventory included in ending delinquent inventory		254		211		159

(1)Approximately 29%, 20%, and 15% of the primary delinquency inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of June 30, 2022, December 31, 2021, and June 30, 2021, respectively.