Unpaid losses and LAE

6 Months Ended

Jun. 30, 2014

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.

	Period Ending
	June 30, 2014			December 31, 2013
	(Dollars in Thousands)
Balance at January 1	$	61,016		$	49,908
Less reinsurance recoverables		(2,742	)		(3,503	)
Net balance at January 1	$	58,274		$	46,405
Incurred related to
Current year	$	41,932		$	56,209
Prior years		3,418			201
Total incurred	$	45,350		$	56,410
Paid related to
Current year	$	11,291		$	22,695
Prior years		24,219			21,846
Total paid	$	35,510		$	44,541
Net balance at period end	$	68,114		$	58,274
Plus reinsurance recoverables		2,921			2,742
Balance as of June 30, 2014	$	71,035		$	61,016

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 that may arise from incidents reported.

Our review of the liability for losses and LAE includes a re-evaluation of the adequacy of reserve levels for prior year's claims. We increased the liability for losses and LAE for claims occurring in prior years by $3.4 million during the six months ended June 30, 2014. This development is attributable to adverse decisions on matters beyond the insurance company policy limits. These matters are resolved and further development is unlikely.We increased the liability for losses and LAE for claims occurring in prior years by $0.2 million during the year ended December 31, 2013.

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.