Unpaid losses and LAE

6 Months Ended

Jun. 30, 2015

(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, 2015			December 31, 2014
	(Dollars in Thousands)

Balance at January 1	$	78,330		$	61,016
Less reinsurance recoverables		(12,534	)		(2,742	)
Net balance at January 1	$	65,796		$	58,274

Incurred related to
Current year	$	49,754		$	79,932
Prior years		(2,656	)		1,104
Total incurred	$	47,098		$	81,036

Paid related to
Current year	$	18,655		$	42,391
Prior years		21,451			31,123
Total paid	$	40,106		$	73,514

Net balance at period end	$	72,788		$	65,796
Plus reinsurance recoverables		15,294			12,534
Balance as of period end	$	88,082		$	78,330

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 decreased the liability for losses and LAE for claims occurring in prior years by $2.7 million during the six months ended June 30, 2015. We increased the liability for losses and LAE for claims occurring in prior years by $1.1 million during the year ended December 31, 2014.

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.