Loss Reserves (Tables)

12 Months Ended

Dec. 31, 2023

Reconciliation of Beginning and Ending Loss Reserves

Table 8.1 provides a reconciliation of beginning and ending loss reserves as of and for the past three years:


Development of loss reserves
Table	8.1
(In thousands)		2023		2022		2021
Reserve at beginning of year		$	557,988	$	883,522	$	880,537
Less reinsurance recoverable		28,240		66,905		95,042
Net reserve at beginning of year		529,748		816,617		785,495

Losses incurred:
Losses and LAE incurred in respect of delinquent notices received in:
Current year		187,658		149,565		124,592
Prior years (1)		(208,514)		(404,130)		(60,015)
Total losses incurred		(20,856)		(254,565)		64,577

Losses paid:
Losses and LAE paid in respect of delinquent notices received in:
Current year		566		362		664
Prior years		45,645		49,626		68,769
Reinsurance terminations (2)		(9,396)		(17,684)		(35,978)
Total losses paid		36,815		32,304		33,455
Net reserve at end of year		472,077		529,748		816,617
Plus reinsurance recoverables		33,302		28,240		66,905
Reserve at end of year		$	505,379	$	557,988	$	883,522

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

(2)In a reinsurance termination, amounts for any incurred but unpaid losses are due to us from the reinsurers. As a result, the amount due from the reinsurers is reclassified from reinsurance recoverable on loss reserves to reinsurance recoverable on paid losses, resulting in no impact to losses incurred. (See Note 9 - "Reinsurance")

Prior Year Development of the Reserves

The prior year loss reserve development for the past three years is reflected in the table 8.2 below.


Reserve development on previously received delinquencies
Table	8.2
(In thousands)		2023		2022		2021
Increase (decrease) in estimated claim rate on primary defaults		$	(200,983)	$	(400,577)	$	(82,904)
Change in estimates related to severity on primary defaults, pool reserves, LAE reserves, reinsurance, and other		(7,531)		(3,553)		22,889
Total prior year loss development (1)		$	(208,514)	$	(404,130)	$	(60,015)

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

Rollforward of Delinquent Inventory Roll-Forward

A roll-forward of our primary delinquency inventory for the years ended December 31, 2023, 2022, and 2021 appears in table 8.3 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.


Primary delinquency inventory roll-forward
Table	8.3
		2023	2022	2021
Beginning delinquent inventory		26,387	33,290	57,710
New Notices		46,825	42,988	42,432
Cures		(46,108)	(48,262)	(64,896)
Paid claims		(1,328)	(1,305)	(1,223)
Rescissions and denials		(45)	(35)	(38)
Other items removed from inventory		(81)	(289)	(695)
Ending delinquent inventory		25,650	26,387	33,290

Aging of the Primary Default Inventory

The number of consecutive months that a borrower has been delinquent is shown in table 8.4 below.


Primary delinquency inventory - consecutive months delinquent
Table	8.4
		December 31,
		2023		2022		2021
3 months or less		9,175		8,820		7,586
4 - 11 months		8,900		8,217		7,990
12 months or more (1)		7,575		9,350		17,714
Total		25,650		26,387		33,290

3 months or less		36	%	33	%	23	%
4 - 11 months		35	%	31	%	24	%
12 months or more		29	%	36	%	53	%
Total		100	%	100	%	100	%

Primary claims received inventory included in ending delinquent inventory		302		267		211

(1)Approximately 37%, 36%, and 20% of the delinquent inventory that has been delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of December 31, 2023, 2022 and 2021, respectively.