Liability for Unpaid Claims and Claim Adjustment Expenses

9 Months Ended

Sep. 30, 2015

Insurance [Abstract]

Liability for Unpaid Claims and Claim Adjustment Expenses

Note 11 – Liability for Unpaid Claims and Claim Adjustment Expenses

The liability for unpaid claims and claim adjustment expenses (“claims”) for accident and health, and property and casualty insurance is included in “Policy and contract claims” in the consolidated statements of financial position and is the amount estimated for claims that have been reported but not settled and IBNR claims. Liability for unpaid claims are estimated based upon American National’s historical experience and actuarial assumptions that consider the effects of current developments, anticipated trends and risk management programs and reduced for anticipated salvage and subrogation. The effects of the changes are included in the consolidated results of operations in the period in which the changes occur.

Information regarding the liability for unpaid claims is shown below (in thousands):

	Nine months ended September 30,
	2015			2014
Unpaid claims balance, beginning	$	1,132,394		$	1,096,299
Less reinsurance recoverables		245,906			215,161
Net beginning balance		886,488			881,138
Incurred related to
Current		705,988			706,824
Prior years		(7,835	)		(29,044	)
Total incurred claims		698,153			677,780
Paid claims related to
Current		414,287			410,077
Prior years		284,732			252,082
Total paid claims		699,019			662,159
Net balance		885,622			896,759
Plus reinsurance recoverables		215,464			235,485
Unpaid claims balance, ending	$	1,101,086		$	1,132,244

The net and gross reserve calculations have shown favorable development as a result of favorable loss emergence compared to what was implied by the loss development patterns used in the original estimation of losses in prior years. Estimates for ultimate incurred claims attributable to insured events of prior years decreased by approximately $7,835,000 during the first nine months of 2015 and $29,044,000 during the first nine months of 2014, reflecting lower-than-anticipated losses in the workers compensation, commercial auto, and personal auto liability lines of business.