Losses and LAE

9 Months Ended

Sep. 30, 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)	September 30, 2022		December 31, 2021
Primary case	$	454,726	$	790,380
Primary IBNR and LAE	13,672		22,745
Pool and other	9,349		10,011
Mortgage insurance	477,747		823,136
Title insurance	5,917		5,506
Total reserve for losses and LAE	$	483,664	$	828,642

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

	Nine Months Ended September 30,
(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)	115,159		119,823
Prior years	(411,024)		(53,947)
Total incurred	(295,865)		65,876
Deduct: Paid claims and LAE related to:
Current year (2)	381		499
Prior years	12,123		24,431
Total paid	12,504		24,930
Balance at end of period, net of reinsurance recoverables	448,091		813,284
Add: Reinsurance recoverables (1)	29,656		74,737
Balance at end of period	$	477,747	$	888,021

(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

Total incurred losses are driven by: (i) case reserves established for new default notices, which are 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 and (ii) reserve developments on prior period defaults, which are primarily impacted by changes to our prior Default to Claim Rate assumptions.

New primary default notices totaled 27,003 for the nine months ended September 30, 2022, compared to 28,128 for the nine months ended September 30, 2021, representing a decrease of 4%. Our gross Default to Claim Rate assumption applied to new defaults was 8.0% as of both September 30, 2022, and September 30, 2021, as we continue to closely monitor the trends in Cures and claims paid for our default inventory, while also weighing the risks and uncertainties associated with the

current economic environment. 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 nine months ended September 30, 2022, as compared to the same period in the prior year.

Our provision for losses during both the first nine months of 2022 and 2021 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 mortgage 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.

Claims Paid

Total claims paid decreased for the nine months ended September 30, 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.