Loss Reserves (Tables)

6 Months Ended

Jun. 30, 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 six months ended June 30, 2023 and 2022.


Development of reserves for losses and loss adjustment expenses
Table	11.1
		Six Months Ended June 30,
(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		89,465		68,210
Prior years (1)		(100,710)		(186,582)
Total losses incurred		(11,245)		(118,372)

Losses paid:
Losses and LAE paid in respect of delinquency notices received in:
Current year		25		116
Prior years		22,272		24,909

Total losses paid		22,297		25,025
Net reserve at end of period		496,206		673,220
Plus reinsurance recoverable		34,475		53,958
Reserve at end of period		$	530,681	$	727,178

(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 ended June 30, 2023 and 2022 is shown in table 11.2 below.


Reserve development on previously received delinquencies
Table	11.2
		Six Months Ended June 30,
(In thousands)		2023		2022
Increase (decrease) in estimated claim rate on primary defaults		$	(99,148)	$	(186,163)

Change in estimates related to severity on primary defaults, pool reserves, LAE reserves, reinsurance, and other		(1,562)		(419)
Total prior year loss development (1)		$	(100,710)	$	(186,582)

(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, 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 June 30,		Six Months Ended June 30,
		2023	2022	2023	2022
Delinquency inventory at beginning of period		24,757	30,462	26,387	33,290
New notices		10,580	9,396	21,877	20,099
Cures		(11,156)	(12,677)	(23,763)	(25,877)
Paid claims		(348)	(319)	(659)	(641)
Rescissions and denials		(10)	(7)	(19)	(16)

Delinquency inventory at end of period		23,823	26,855	23,823	26,855

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, 2023		December 31, 2022		June 30, 2022
3 months or less		7,663		8,820		6,791
4-11 months		8,070		8,217		7,946
12 months or more (1)		8,090		9,350		12,118
Total		23,823		26,387		26,855
3 months or less		32	%	33	%	25	%
4-11 months		34	%	31	%	30	%
12 months or more		34	%	36	%	45	%
Total		100	%	100	%	100	%
Primary claims received inventory included in ending delinquent inventory		291		267		254

(1)Approximately 41%, 36%, and 29% 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, 2023, December 31, 2022, and June 30, 2022, respectively.