Loss Reserves (Tables)

3 Months Ended

Mar. 31, 2023

Reconciliation of beginning and ending loss reserves

Table 11.1 provides a reconciliation of beginning and ending loss reserves as of and for the three months ended March 31, 2023 and 2022.


Development of reserves for losses and loss adjustment expenses
Table	11.1
		Three Months Ended March 31,
(In thousands)		2023		2022
Reserve at beginning of period		$	557,988	$	883,522
Less reinsurance recoverable		28,240		66,905
Net reserve at beginning of period		529,748		816,617

Losses incurred:
Losses and LAE incurred in respect of delinquency notices received in:
Current year		47,212		36,344
Prior years (1)		(40,766)		(55,658)
Total losses incurred		6,446		(19,314)

Losses paid:
Losses and LAE paid in respect of delinquency notices received in:
Current year		—		—
Prior years		10,440		10,748

Total losses paid		10,440		10,748
Net reserve at end of period		525,754		786,555
Plus reinsurance recoverable		32,761		64,717
Reserve at end of period		$	558,515	$	851,272

(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 three months of March 31, 2023 and 2022 is shown in table 11.2 below.


Reserve development on previously received delinquencies
Table	11.2
		Three Months Ended March 31,
(In thousands)		2023		2022
Increase (decrease) in estimated claim rate on primary defaults		$	(43,431)	$	(55,777)

Change in estimates related to severity on primary defaults, pool reserves, LAE reserves, reinsurance, and other		2,665		119
Total prior year loss development (1)		$	(40,766)	$	(55,658)

(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 months ended March 31, 2023 and 2022 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 March 31,
		2023	2022
Delinquency inventory at beginning of period		26,387	33,290
New notices		11,297	10,703
Cures		(12,607)	(13,200)
Paid claims		(311)	(322)
Rescissions and denials		(9)	(9)

Delinquency inventory at end of period		24,757	30,462

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
		March 31, 2023		December 31, 2022		March 31, 2022
3 months or less		7,573		8,820		7,382
4-11 months		8,563		8,217		8,131
12 months or more (1)		8,621		9,350		14,949
Total		24,757		26,387		30,462
3 months or less		31	%	33	%	24	%
4-11 months		34	%	31	%	27	%
12 months or more		35	%	36	%	49	%
Total		100	%	100	%	100	%
Primary claims received inventory included in ending delinquent inventory		296		267		217

(1)Approximately 38%, 36%, and 23% of the primary delinquency inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of March 31, 2023, December 31, 2022, and March 31, 2022, respectively.