Liability for Unpaid Claims and Claim Adjustment Expenses (Notes)

3 Months Ended

Mar. 31, 2017

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

Liability for Unpaid Claims and Claim Adjustment Expenses

Roll forward of Claim Liability

The following table presents the activity in the net liability for unpaid losses and allocated loss adjustment expenses of short-duration contracts for the following periods:



	Three Months Ended March 31,
	2017			2016
Policy liabilities and unpaid claims balance as of January 1	$	103,391		$	80,663
Less : liabilities of policy-holder accounts balances, gross	(17,417		)	(19,037		)
Less : non-insurance warranty benefit claim liabilities	(91		)	(116		)
Gross liabilities for unpaid losses and loss adjustment expenses	85,883			61,510
Less : reinsurance recoverable on unpaid losses - short duration	(63,112		)	(42,341		)
Less : other lines, gross	(208		)	(163		)
Net balance as of January 1, short duration	22,563			19,006

Incurred (short duration) related to:
Current year	26,004			20,355
Prior years	2,684			(2,829		)
Total incurred	28,688			17,526

Paid (short duration) related to:
Current year	14,035			5,926
Prior years	13,546			9,014
Total paid	27,581			14,940
Net balance as of March 31, short duration	23,670			21,592
Plus : reinsurance recoverable on unpaid losses - short duration	63,708			49,453
Plus : other lines, gross	199			141
Gross liabilities for unpaid losses and loss adjustment expenses	87,577			71,186
Plus : liabilities of policy-holder accounts balances, gross	16,928			18,650
Plus : non-insurance warranty benefit claim liabilities	118			91
Policy liabilities and unpaid claims balance as of March 31	$	104,623		$	89,927

The following schedule reconciles the total on short duration contracts per the table above to the amount of total losses incurred as presented in the consolidated statement of operations, excluding the amount for member benefit claims:



	Three Months Ended March 31,
	2017			2016
Total incurred	$	28,688		$	17,526
Other lines incurred	(2		)	25
Unallocated loss adjustment expense	469			397
Total losses incurred	$	29,155		$	17,948

For the three months ended March 31, 2017, the Company’s specialty insurance business experienced an increase in prior year case development of $2,684. This included $707 in its non-standard auto business with the remaining change primarily in warranty and credit lines of business. The warranty and credit lines of business are primarily in retrospective commission arrangements that minimally impacts the operating income of the company.

For the three months ended March 31, 2016, the Company’s specialty insurance business experienced a decrease in prior year case development of $2,829. This included favorable development in its credit lines of business partially offset by $1,246 in non-standard auto with the remainder in warranty. The warranty and credit lines of business are primarily in retrospective commission arrangements that minimally impacts the operating income of the company.