Losses and LAE

3 Months Ended

Mar. 31, 2022

Our reserve for losses and LAE, at the end of each period indicated, consisted of the following.


Reserve for losses and LAE

(In thousands)	March 31, 2022		December 31, 2021
Mortgage insurance loss reserves (1)	$	721,510	$	823,136
Title insurance loss reserves	5,737		5,506
Total reserve for losses and LAE	$	727,247	$	828,642

(1)Primarily comprises first lien primary case reserves of $691.1 million and $790.4 million at March 31, 2022 and December 31, 2021, respectively.

For the periods indicated, the following table presents information relating to our mortgage insurance reserve for losses, including our IBNR reserve and LAE.


Rollforward of mortgage insurance reserve for losses

	Three Months Ended March 31,
(In thousands)	2022		2021
Balance at beginning of period	$	823,136	$	844,107
Less: Reinsurance recoverables (1)	66,676		71,769
Balance at beginning of period, net of reinsurance recoverables	756,460		772,338
Add: Losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)	40,662		50,312
Prior years	(124,897)		(4,513)
Total incurred	(84,235)		45,799
Deduct: Paid claims and LAE related to:
Current year (2)	—		16
Prior years	4,738		10,457
Total paid	4,738		10,473
Balance at end of period, net of reinsurance recoverables	667,487		807,664
Add: Reinsurance recoverables (1)	54,023		75,174
Balance at end of period	$	721,510	$	882,838

(1)Related to ceded losses recoverable, if any, on reinsurance transactions. See Note 8 for additional information.

(2)Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default.

Reserve Activity

Incurred Losses

Case reserves established for new default notices have been the primary driver of our total incurred losses in recent years, and they were primarily impacted by the number of new primary default notices received in the period and our related gross Default to Claim Rate assumption applied to those new defaults.

New primary default notices totaled 9,393 for the three months ended March 31, 2022, compared to 11,851 for the three months ended March 31, 2021, representing a decrease of 21%. Our gross Default to Claim Rate assumption applied to new defaults was 8.0% as of both March 31, 2022 and March 31, 2021. As a result, the decrease in new default notices was the primary driver of the decrease in losses incurred related to current year defaults for the three months ended March 31, 2022, as compared to the same period in the prior year.

Our provision for losses during the first three months of 2022 was positively impacted by favorable reserve development on prior year defaults, primarily as a result of more favorable trends in Cures than originally estimated due to favorable outcomes resulting from forbearance programs implemented in response to the COVID-19 pandemic as well as positive trends in home price appreciation. These favorable observed trends resulted in reductions in our Default to Claim Rate assumptions for prior year default notices, particularly for those defaults first reported in 2020 following the start of the COVID-19 pandemic.

Our provision for losses during the first three months of 2021 was also positively impacted by favorable reserve development on prior year defaults, primarily due to higher Cures than previously estimated.

Claims Paid

Total claims paid decreased for the three months ended March 31, 2022 compared to the same period in 2021. The decrease in claims paid is primarily attributable to a reduction in payments made to settle certain previously disclosed legal proceedings.

For additional information about our Reserve for Losses and LAE, including our accounting policies, see Notes 2 and 11 of Notes to Consolidated Financial Statements in our 2021 Form 10-K.