1. | SEC COMMENT: You disclose on page 23 under results of operations - 2016 compared to 2015 that you close your books on the last Friday of the month resulting in 2016 being a 53-week year. You also disclose that excluding the impact of this extra week, gross written premiums would have decreased 0.3% for the year. Please address the following: |
• | Tell us why you identify your fiscal year as the calendar year when you appear to close your books on the last Friday of each month. |
• | As you present your financial statements as of and for the periods ending December 31 but close your books on a different date, tell us: |
◦ | How you process material transactions or events occurring after your close but before the stated period end; |
◦ | The process you undertake to evaluate that your financial statements as of and for the period ending the last Friday of the month are not materially different from those that would be presented if you closed on the last day of the month; |
◦ | Why the presentation of a 53-week year in 2016 is not materially different from the calendar year; and |
◦ | Why you disclose herein that you evaluate events that occurred after December 31 for recognition or disclosure in your financial statements when you closed your books prior to December 31. |
2. | SEC COMMENT: Please tell us why you did not disaggregate liability coverage from property damage coverage in your Personal Auto and Commercial Vehicle claims development tables presented on page 47. Provide us the information that would be provided in separate tables for liability coverage and property damage coverage for each of these segments, if available. If not available, please provide us other quantitative and qualitative information to support aggregating these coverages in the same tables. |
a. | Disclosures presented outside the financial statements (for example, in earnings releases, annual reports, statutory filings, or investor presentations) |
b. | Information regularly reviewed by the chief operating decision maker for evaluating financial performance |
c. | Other information that is similar to the types of information identified in (a) and (b) that is used by the insurance entity or user of the insurance entity's financial statements to evaluate the insurance entity's financial performance or make resource allocation decisions. |
a. | Type of coverage (for example, major product line) |
b. | Geography (for example, country or region) |
c. | Reportable segment as defined in Topic 280 on segment reporting |
d. | Market or type of customer (for example, personal or commercial lines of business) |
e. | Claim duration (for example, claims that have short settlement periods or claims that have long settlement periods)." |
Personal Auto - Liability | ||||||||||||||||||||||||||||||||||||||||
Accident Year | Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31, | IBNR & expected development on reported claims | Cumulative number of reported claims (1) | Severity (2) | ||||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||||||||||||||
2007 | $ | 411,438 | $ | 415,375 | $ | 402,671 | $ | 391,232 | $ | 387,688 | $ | 383,650 | $ | 383,707 | $ | 383,118 | $ | 382,935 | $ | 383,122 | $ | 0 | 174,535 | $ | 2,195 | |||||||||||||||
2008 | 370,950 | 365,395 | 348,841 | 344,914 | 342,775 | 343,137 | 341,566 | 340,998 | 340,785 | 4 | 151,691 | 2,247 | ||||||||||||||||||||||||||||
2009 | 357,137 | 336,224 | 334,823 | 333,895 | 332,731 | 330,929 | 330,315 | 330,152 | 10 | 145,957 | 2,262 | |||||||||||||||||||||||||||||
2010 | 386,452 | 400,888 | 404,963 | 406,602 | 404,872 | 406,279 | 404,807 | 16 | 170,117 | 2,379 | ||||||||||||||||||||||||||||||
2011 | 425,619 | 453,746 | 459,406 | 458,171 | 459,418 | 456,862 | 547 | 187,708 | 2,431 | |||||||||||||||||||||||||||||||
2012 | 521,603 | 540,012 | 540,572 | 541,696 | 538,233 | 5,550 | 216,346 | 2,462 | ||||||||||||||||||||||||||||||||
2013 | 588,566 | 589,991 | 575,727 | 568,481 | 11,537 | 219,286 | 2,540 | |||||||||||||||||||||||||||||||||
2014 | 569,899 | 572,955 | 561,861 | 21,271 | 213,188 | 2,536 | ||||||||||||||||||||||||||||||||||
2015 | 583,490 | 582,177 | 39,910 | 215,596 | 2,515 | |||||||||||||||||||||||||||||||||||
2016 | 596,021 | 174,184 | 199,863 | 2,111 | ||||||||||||||||||||||||||||||||||||
Total | $ | 4,762,501 |
Accident Year | Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31, | ||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||||||||||||||||||||||||||
2007 | $ | 178,212 | $ | 325,599 | $ | 362,049 | $ | 374,406 | $ | 379,472 | $ | 380,982 | $ | 381,895 | $ | 382,417 | $ | 382,697 | $ | 382,985 | |||||||||||||||
2008 | 164,563 | 284,203 | 317,660 | 331,628 | 336,700 | 339,436 | 340,305 | 340,495 | 340,649 | ||||||||||||||||||||||||||
2009 | 153,561 | 270,633 | 309,115 | 322,313 | 326,575 | 328,647 | 329,386 | 329,793 | |||||||||||||||||||||||||||
2010 | 182,160 | 332,625 | 374,717 | 391,125 | 397,254 | 401,597 | 403,976 | ||||||||||||||||||||||||||||
2011 | 201,769 | 374,930 | 423,456 | 442,710 | 450,718 | 454,637 | |||||||||||||||||||||||||||||
2012 | 246,387 | 444,359 | 501,466 | 521,104 | 529,190 | ||||||||||||||||||||||||||||||
2013 | 271,961 | 477,408 | 530,162 | 548,631 | |||||||||||||||||||||||||||||||
2014 | 270,893 | 470,297 | 521,257 | ||||||||||||||||||||||||||||||||
2015 | 282,064 | 488,501 | |||||||||||||||||||||||||||||||||
2016 | 290,108 | ||||||||||||||||||||||||||||||||||
Total | $ | 4,289,727 | |||||||||||||||||||||||||||||||||
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable | 1,230 | ||||||||||||||||||||||||||||||||||
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable | $ | 474,003 | |||||||||||||||||||||||||||||||||
(1) | The cumulative number of reported claims is measured by individual claimant at a coverage level. | ||||||||||||||||||||||||||||||||||
(2) | Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years. |
Personal Auto - Physical Damage | ||||||||||||||||||||||||||||||||||||||||
Accident Year | Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31, | IBNR & expected development on reported claims | Cumulative number of reported claims (1) | Severity (2) | ||||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||||||||||||||
2007 | $ | 188,649 | $ | 197,180 | $ | 194,147 | $ | 194,293 | $ | 194,466 | $ | 194,536 | $ | 194,722 | $ | 194,681 | $ | 194,642 | $ | 194,655 | $ | 0 | 108,552 | $ | 1,793 | |||||||||||||||
2008 | 174,923 | 167,898 | 168,284 | 168,261 | 168,366 | 168,353 | 168,356 | 168,252 | 168,272 | 0 | 95,511 | 1,762 | ||||||||||||||||||||||||||||
2009 | 140,256 | 137,104 | 137,949 | 137,972 | 138,983 | 141,594 | 142,685 | 143,208 | 0 | 84,871 | 1,687 | |||||||||||||||||||||||||||||
2010 | 154,850 | 153,279 | 152,628 | 152,651 | 152,753 | 152,656 | 152,670 | 0 | 100,585 | 1,518 | ||||||||||||||||||||||||||||||
2011 | 183,016 | 179,265 | 178,993 | 179,399 | 179,090 | 179,043 | 31 | 120,196 | 1,489 | |||||||||||||||||||||||||||||||
2012 | 218,216 | 210,510 | 210,690 | 209,905 | 209,933 | 94 | 143,890 | 1,458 | ||||||||||||||||||||||||||||||||
2013 | 216,472 | 215,469 | 213,701 | 213,888 | 199 | 145,498 | 1,469 | |||||||||||||||||||||||||||||||||
2014 | 237,379 | 223,130 | 223,068 | 540 | 140,825 | 1,580 | ||||||||||||||||||||||||||||||||||
2015 | 255,569 | 258,967 | 1,718 | 149,441 | 1,721 | |||||||||||||||||||||||||||||||||||
2016 | 278,305 | 31,874 | 143,391 | 1,719 | ||||||||||||||||||||||||||||||||||||
Total | $ | 2,022,007 |
Accident Year | Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31, | ||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||||||||||||||||||||||||||
2007 | $ | 180,847 | $ | 197,112 | $ | 194,471 | $ | 194,386 | $ | 194,609 | $ | 194,618 | $ | 194,761 | $ | 194,730 | $ | 194,686 | $ | 194,655 | |||||||||||||||
2008 | 155,754 | 168,890 | 168,207 | 168,248 | 168,363 | 168,386 | 168,368 | 168,336 | 168,311 | ||||||||||||||||||||||||||
2009 | 131,593 | 137,902 | 138,063 | 138,150 | 138,878 | 141,385 | 142,403 | 143,282 | |||||||||||||||||||||||||||
2010 | 143,751 | 153,295 | 152,821 | 152,759 | 152,770 | 152,812 | 152,805 | ||||||||||||||||||||||||||||
2011 | 172,598 | 179,315 | 179,066 | 179,209 | 179,274 | 179,224 | |||||||||||||||||||||||||||||
2012 | 204,047 | 210,945 | 210,170 | 210,102 | 210,164 | ||||||||||||||||||||||||||||||
2013 | 208,503 | 214,631 | 214,026 | 214,139 | |||||||||||||||||||||||||||||||
2014 | 214,491 | 224,311 | 223,430 | ||||||||||||||||||||||||||||||||
2015 | 248,200 | 260,349 | |||||||||||||||||||||||||||||||||
2016 | 264,108 | ||||||||||||||||||||||||||||||||||
Total | $ | 2,010,467 | |||||||||||||||||||||||||||||||||
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable | — | ||||||||||||||||||||||||||||||||||
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable | $ | 11,542 | |||||||||||||||||||||||||||||||||
(1) | The cumulative number of reported claims is measured by individual claimant at a coverage level. | ||||||||||||||||||||||||||||||||||
(2) | Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years. |
Commercial Vehicle - Liability | ||||||||||||||||||||||||||||||||||||||||
Accident Year | Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31, | IBNR & expected development on reported claims | Cumulative number of reported claims (1) | Severity (2) | ||||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||||||||||||||
2007 | $ | 21,796 | $ | 20,103 | $ | 19,423 | $ | 18,324 | $ | 17,503 | $ | 17,188 | $ | 17,075 | $ | 17,038 | $ | 17,031 | $ | 17,030 | $ | 0 | 3,987 | $ | 4,271 | |||||||||||||||
2008 | 20,258 | 17,047 | 14,845 | 14,778 | 14,218 | 13,939 | 13,865 | 13,890 | 13,890 | 0 | 4,100 | 3,388 | ||||||||||||||||||||||||||||
2009 | 30,227 | 26,644 | 25,977 | 23,687 | 22,332 | 22,265 | 22,137 | 22,120 | 0 | 5,878 | 3,763 | |||||||||||||||||||||||||||||
2010 | 34,557 | 32,609 | 29,343 | 28,020 | 26,881 | 27,332 | 26,949 | 44 | 7,273 | 3,699 | ||||||||||||||||||||||||||||||
2011 | 33,090 | 32,272 | 29,448 | 28,318 | 28,396 | 27,772 | 60 | 7,613 | 3,640 | |||||||||||||||||||||||||||||||
2012 | 42,396 | 38,781 | 38,144 | 38,279 | 37,722 | 706 | 8,680 | 4,265 | ||||||||||||||||||||||||||||||||
2013 | 52,590 | 42,327 | 43,025 | 42,317 | 1,123 | 9,682 | 4,255 | |||||||||||||||||||||||||||||||||
2014 | 54,452 | 52,320 | 53,700 | 2,073 | 11,375 | 4,539 | ||||||||||||||||||||||||||||||||||
2015 | 67,731 | 70,252 | 3,155 | 13,694 | 4,900 | |||||||||||||||||||||||||||||||||||
2016 | 79,025 | 27,595 | 13,621 | 3,776 | ||||||||||||||||||||||||||||||||||||
Total | $ | 390,777 |
Accident Year | Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31, | ||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||||||||||||||||||||||||||
2007 | $ | 6,204 | $ | 11,973 | $ | 14,129 | $ | 15,474 | $ | 16,829 | $ | 16,961 | $ | 17,018 | $ | 17,029 | $ | 17,029 | $ | 17,029 | |||||||||||||||
2008 | 5,471 | 10,367 | 12,124 | 13,224 | 13,780 | 13,841 | 13,842 | 13,888 | 13,888 | ||||||||||||||||||||||||||
2009 | 8,704 | 16,508 | 20,695 | 21,481 | 21,962 | 22,073 | 22,084 | 22,090 | |||||||||||||||||||||||||||
2010 | 10,156 | 19,375 | 23,600 | 25,678 | 26,177 | 26,774 | 26,838 | ||||||||||||||||||||||||||||
2011 | 11,046 | 21,665 | 25,402 | 26,768 | 27,489 | 27,641 | |||||||||||||||||||||||||||||
2012 | 14,608 | 27,182 | 33,381 | 35,505 | 36,469 | ||||||||||||||||||||||||||||||
2013 | 15,276 | 30,953 | 36,150 | 38,178 | |||||||||||||||||||||||||||||||
2014 | 18,518 | 36,152 | 44,168 | ||||||||||||||||||||||||||||||||
2015 | 24,840 | 49,828 | |||||||||||||||||||||||||||||||||
2016 | 27,539 | ||||||||||||||||||||||||||||||||||
Total | $ | 303,668 | |||||||||||||||||||||||||||||||||
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable | 33 | ||||||||||||||||||||||||||||||||||
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable | $ | 87,141 | |||||||||||||||||||||||||||||||||
(1) | The cumulative number of reported claims is measured by individual claimant at a coverage level. | ||||||||||||||||||||||||||||||||||
(2) | Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years. |
Commercial Vehicle - Physical Damage | ||||||||||||||||||||||||||||||||||||||||
Accident Year | Incurred losses and ALAE, net of reinsurance recoverable For the years ended December 31, | IBNR & expected development on reported claims | Cumulative number of reported claims (1) | Severity (2) | ||||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||||||||||||||||
2007 | $ | 3,893 | $ | 3,640 | $ | 3,604 | $ | 3,611 | $ | 3,596 | $ | 3,593 | $ | 3,598 | $ | 3,601 | $ | 3,601 | $ | 3,601 | $ | 0 | 2,369 | $ | 1,520 | |||||||||||||||
2008 | 4,199 | 4,140 | 4,115 | 4,115 | 4,102 | 4,106 | 4,108 | 4,106 | 4,106 | 0 | 2,495 | 1,646 | ||||||||||||||||||||||||||||
2009 | 5,400 | 5,259 | 5,249 | 5,257 | 5,266 | 5,269 | 5,266 | 5,265 | 0 | 3,181 | 1,655 | |||||||||||||||||||||||||||||
2010 | 6,765 | 6,540 | 6,538 | 6,519 | 6,515 | 6,513 | 6,511 | 0 | 3,929 | 1,657 | ||||||||||||||||||||||||||||||
2011 | 7,204 | 6,822 | 6,754 | 6,734 | 6,734 | 6,735 | 0 | 3,884 | 1,734 | |||||||||||||||||||||||||||||||
2012 | 8,690 | 8,169 | 8,140 | 8,126 | 8,110 | 0 | 4,438 | 1,827 | ||||||||||||||||||||||||||||||||
2013 | 9,567 | 9,112 | 9,057 | 9,090 | 0 | 4,744 | 1,916 | |||||||||||||||||||||||||||||||||
2014 | 11,272 | 10,984 | 10,982 | 56 | 5,360 | 2,038 | ||||||||||||||||||||||||||||||||||
2015 | 14,117 | 14,062 | 117 | 6,349 | 2,196 | |||||||||||||||||||||||||||||||||||
2016 | 16,512 | 1,897 | 6,688 | 2,185 | ||||||||||||||||||||||||||||||||||||
Total | $ | 84,973 |
Accident Year | Cumulative paid losses and ALAE, net of reinsurance recoverable For the years ended December 31, | ||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||||||||||||||||||||||||||
2007 | $ | 3,366 | $ | 3,645 | $ | 3,601 | $ | 3,602 | $ | 3,595 | $ | 3,594 | $ | 3,599 | $ | 3,601 | $ | 3,601 | $ | 3,601 | |||||||||||||||
2008 | 3,623 | 4,122 | 4,100 | 4,107 | 4,106 | 4,106 | 4,106 | 4,106 | 4,106 | ||||||||||||||||||||||||||
2009 | 4,759 | 5,227 | 5,234 | 5,253 | 5,267 | 5,266 | 5,267 | 5,265 | |||||||||||||||||||||||||||
2010 | 5,953 | 6,528 | 6,520 | 6,513 | 6,513 | 6,512 | 6,511 | ||||||||||||||||||||||||||||
2011 | 6,351 | 6,762 | 6,724 | 6,727 | 6,734 | 6,734 | |||||||||||||||||||||||||||||
2012 | 7,665 | 8,140 | 8,120 | 8,118 | 8,109 | ||||||||||||||||||||||||||||||
2013 | 8,557 | 9,085 | 9,049 | 9,092 | |||||||||||||||||||||||||||||||
2014 | 10,110 | 11,010 | 10,963 | ||||||||||||||||||||||||||||||||
2015 | 13,079 | 14,104 | |||||||||||||||||||||||||||||||||
2016 | 14,929 | ||||||||||||||||||||||||||||||||||
Total | $ | 83,414 | |||||||||||||||||||||||||||||||||
Outstanding liabilities for unpaid losses and ALAE prior to 2007, net of reinsurance recoverable | — | ||||||||||||||||||||||||||||||||||
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance recoverable | $ | 1,559 | |||||||||||||||||||||||||||||||||
(1) | The cumulative number of reported claims is measured by individual claimant at a coverage level. | ||||||||||||||||||||||||||||||||||
(2) | Calculated severity amounts by accident year are based on inception-to-date incurred less IBNR and expected development dollars and reported claims. Note that older accident years are more developed than recent accident years. |
Average annual payout of losses and LAE, net of reinsurance | ||||||||||||||||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | |||||||||||
Personal Auto - Liability | 46.9 | % | 36.2 | % | 10.0 | % | 3.8 | % | 1.6 | % | 0.8 | % | 0.3 | % | 0.1 | % | 0.1 | % | 0.0 | % |
Personal Auto - Physical Damage | 94.9 | % | 5.1 | % | (0.5 | )% | (0.1 | )% | 0.0 | % | 0.2 | % | 0.1 | % | 0.1 | % | 0.0 | % | 0.0 | % |
Commercial Vehicle - Liability | 37.2 | % | 35.3 | % | 14.8 | % | 6.8 | % | 4.2 | % | 1.2 | % | 0.2 | % | 0.2 | % | 0.0 | % | 0.0 | % |
Commercial Vehicle - Physical Damage | 92.2 | % | 8.1 | % | (0.4 | )% | 0.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % |
3. | SEC COMMENT: You disclose that certain claims and legal actions have been brought against you for which you have accrued no loss and for which an estimate of a possible range of loss cannot be made. You go on to say that losses incurred because of these cases could have a material adverse impact on net earnings in a given period. Please tell us the nature of these loss contingencies and your consideration for disclosing their nature in your filings under ASC 450-20-50-4a. |