Loss and Loss Expense Reserves

12 Months Ended

Dec. 31, 2015

Loss and Loss Expense Reserves [Abstract]

Loss and Loss Expense Reserves

Note C - Loss and Loss Expense Reserves

Activity in the reserves for losses and loss expenses is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated.

	2015			2014			2013
Reserves at the beginning of the year	$	295,583		$	288,088		$	289,236
Provision for losses and loss expenses:
Claims occurring during the current year		165,812			169,950			156,264
Claims occurring during prior years		(10,062	)		(10,354	)		(5,563	)
Total incurred		155,750			159,596			150,701
Loss and loss expense payments:
Claims occurring during the current year		56,710			59,826			47,908
Claims occurring during prior years		92,870			92,275			103,941
Total paid		149,580			152,101			151,849
Reserves at the end of the year		301,753			295,583			288,088
Reinsurance recoverable on unpaid losses
at the end of the year		211,843			210,519			186,382
Reserves, gross of reinsurance
recoverable, at the end of the year	$	513,596		$	506,102		$	474,470

The table above shows that a savings of $10,062 was developed during 2015 in the settlement of claims occurring on or before December 31, 2014 with comparative developments for the two previous calendar years. The net savings for each year are composed of individual claim savings and deficiencies which, in the aggregate have resulted from the settlement of claims at amounts lower than previously reserved and from changes in estimates of losses incurred but not reported as part of the normal reserving process.

The major components of the developments shown above are as follows for the years ended December 31:
	2015			2014			2013
Property and casualty insurance	$	(10,289	)	$	(5,423	)	$	(1,725	)
Reinsurance		227			(4,931	)		(3,838	)
Totals	$	(10,062	)	$	(10,354	)	$	(5,563	)

Favorable loss development is influenced by the Company's long-standing policy of reserving for losses realistically and a willingness to settle claims based upon a seasoned evaluation of its exposures.  Loss reserves pertaining to the Company's property reinsurance business are established partially by the ceding reinsurers although the Company routinely adjusts such reserves if management determines that additional reserves could be necessary.  There is potential for fluctuations in loss developments related to reinsurance assumed to be more pronounced than those experienced on directly produced business which is reserved entirely by Company personnel. In addition, changes in the Company's net retention under reinsurance treaties will impact developments as more or less business is retained. These trends were considered in the establishment of the Company's reserves at December 31, 2015 and 2014.

Loss reserves on certain permanent total disability workers' compensation reserves have been discounted to present value at pre-tax rates not exceeding 3.5%. At December 31, 2015 and 2014, loss reserves have been reduced by approximately $2,110 and $3,129, respectively. Discounting is applied to these claims since the amount of periodic payments to be made during the lifetime of claimants is fixed and determinable.