Unpaid Losses and LAE

9 Months Ended

Sep. 30, 2012

Unpaid Losses and LAE [Abstract]

Unpaid losses and LAE

(8) Unpaid losses and LAE

The liability for unpaid losses and LAE is determined on an individual-case basis for all incidents reported. The liability also includes amounts for unallocated expenses, anticipated future claim development and Incurred but Not Yet Reported ("IBNR").

Activity in the liability for unpaid losses and LAE is summarized as follows.

	Nine Months Ended September 30,			Year Ended December 31,
	2012			2011
	(Dollars in Thousands)
Balance at January 1	$	59,983		$	66,529
Less reinsurance recoverables		(2,088	)		(6,810	)
Net balance at January 1	$	57,895		$	59,719
Incurred related to
Current year	$	22,551		$	31,893
Prior years		(1,638	)		(997	)
Total incurred	$	20,913		$	30,896
Paid related to
Current year	$	10,149		$	13,672
Prior years		19,687			19,048
Total paid	$	29,836		$	32,720
Net balance at period end	$	48,972		$	57,895
Plus reinsurance recoverables		2,205			2,088
Balance at period end	$	51,177		$	59,983

Based upon consultations with our independent actuarial consultants, we believe that the liability for unpaid losses and LAE is adequate to cover all claims and related expenses which may arise from incidents reported.

As a result of our review of liability for losses and LAE, which includes a re-evaluation of the adequacy of reserve levels for prior year's claims, we decreased the liability for losses and LAE for claims occurring in prior years by $1.6 million for the nine months ended September 30, 2012 and $1.0 million for the year ended December 31, 2011.

We continue to revise our estimates of the ultimate financial impact of claims made resulting from past storms. The revisions to our estimates are based on our analysis of subsequent information that we receive regarding various factors, including: (i) per claim information; (ii) Company and industry historical loss experience; (iii) legislative enactments, judicial decisions, legal developments in the awarding of damages, and (iv) trends in general economic conditions, including the effects of inflation.