Unpaid Loss and loss adjustment expenses

9 Months Ended

Sep. 30, 2015

Unpaid loss and loss adjustment [Abstract]

Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

10 UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES

The establishment of the provision for unpaid loss and loss adjustment expenses is based on known facts and interpretation of circumstances and is therefore a complex and dynamic process influenced by a large variety of factors. These factors include the Company's experience with similar cases and historical trends involving loss payment patterns, pending levels of unpaid loss and loss adjustment expenses, product mix or concentration, loss severity and loss frequency patterns.

Other factors include the continually evolving and changing regulatory and legal environment; actuarial studies; professional experience and expertise of the Company's claims departments' personnel and independent adjusters retained to handle individual claims; the quality of the data used for projection purposes; existing claims management practices including claims-handling and settlement practices; the effect of inflationary trends on future loss settlement costs; court decisions; economic conditions; and public attitudes.

Consequently, the process of determining the provision necessarily involves risks that the actual results will deviate, perhaps materially, from the best estimates made.

The Company's evaluation of the adequacy of unpaid loss and loss adjustment expenses includes a re-estimation of the liability for unpaid loss and loss adjustment expenses relating to each preceding financial year compared to the liability that was previously established.

(a) Property and Casualty

The results of this comparison and the changes in the provision for property and casualty unpaid loss and loss adjustment expenses, net of amounts recoverable from reinsurers, as of September 30, 2015 and September 30, 2014 were as follows:

(in thousands)	September 30, 2015			September 30, 2014
Balance at beginning of period, gross	$	63,895		$	84,534
Less reinsurance recoverable related to property and casualty unpaid loss and loss adjustment expenses	3,203			7,942
Balance at beginning of period, net	60,692			76,592
Incurred related to:
Current year	64,893			61,177
Prior years	(299		)	(1,151		)
Paid related to:
Current year	(37,378		)	(35,172		)
Prior years	(33,993		)	(36,219		)
Disposal of unpaid loss and loss adjustment expenses related to PIH	—			(405		)
Balance at end of period, net	53,915			64,822
Plus reinsurance recoverable related to property and casualty unpaid loss and loss adjustment expenses	1,523			3,334
Balance at end of period, gross	$	55,438		$	68,156

(b) Vehicle Service Agreements

The results of the comparison and the changes in the provision for vehicle service agreement unpaid loss and loss adjustment expenses as of September 30, 2015 and September 30, 2014 were as follows:

(in thousands)	September 30, 2015			September 30, 2014
Balance at beginning of period	$	2,975		$	3,128
Incurred related to:
Current year	4,460			5,190
Prior years	—			—
Paid related to:
Current year	(4,350		)	(5,282		)
Prior years	(110		)	(61		)
Balance at end of period	$	2,975		$	2,975