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Liability for Unpaid Claims and Claim Adjustment Expenses
 12 Months Ended
Dec. 31, 2021
Insurance [Abstract]  
Liability for Unpaid Claims and Claim Adjustment Expenses 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:
20212020
Policy liabilities and unpaid claims balance as of January 1,$233,438 $144,384 
     Less: liabilities of policy-holder account balances, gross(5,419)(11,589)
     Less: non-insurance warranty benefit claim liabilities(30,664)(85)
Gross liabilities for unpaid losses and loss adjustment expenses197,355 132,710 
     Less: reinsurance recoverable on unpaid losses - short duration(113,163)(88,599)
     Less: other lines, gross(247)(230)
Net balance as of January 1, short duration83,945 43,881 
Incurred (short duration) related to:
     Current year250,300 172,007 
     Prior years2,606 5,443 
Total incurred252,906 177,450 
Paid (short duration) related to:
     Current year174,334 127,721 
     Prior years8,105 9,665 
Total paid182,439 137,386 
Net balance as of December 31, short duration
154,412 83,945 
     Plus: reinsurance recoverable on unpaid losses - short duration165,129 113,163 
     Plus: other lines, gross576 247 
Gross liabilities for unpaid losses and loss adjustment expenses320,117 197,355 
     Plus: liabilities of policy-holder account balances, gross801 5,419 
     Plus: non-insurance warranty benefit claim liabilities10,785 30,664 
Policy liabilities and unpaid claims balance as of December 31,
$331,703 $233,438 

The following schedule reconciles the total short duration contracts per the table above to the amount of total losses incurred as presented in the consolidated statements of operations, excluding the amount for member benefit claims:
For the Year Ended December 31,
202120202019
Short duration incurred$252,906 $177,450 $150,094 
Other lines incurred(284)27 184 
Unallocated loss adjustment expenses851 771 731 
Total losses incurred$253,473 $178,248 $151,009 
During the year ended December 31, 2021, the Company experienced an increase in prior year development of $2,606, primarily as a result of higher-than-expected claim severity from business written by a small group of producers of our personal and commercial lines of business.

During the year ended December 31, 2020, the Company experienced an increase in prior year development of $5,443, primarily as a result of higher than expected claim frequency from business written by a small group of producers of our personal and commercial lines of business. The underlying cause of this development was the result of a subset of risk where the loss ratio pegs used in our year end actuarial determination was low given the ultimate frequency that emerged.

During the year ended December 31, 2019, the Company experienced an increase in prior year development of $5,169, primarily in our non-standard auto business. The underlying cause of this development was higher than expected claim frequency.
Management considers the prior year development for each of these years to be insignificant when considered in the context of our annual earned premiums, net as well as our net losses and loss adjustment expenses and member benefit claims expenses. We analyze our development on a quarterly basis and given the short duration nature of our products, favorable or adverse development emerges quickly and allows for timely reserve strengthening, if necessary, or modifications to our product pricing or offerings. The prior year development in 2021, 2020, and 2019 of $2,606, $5,443 and $5,169, respectively, represented 3.7%, 20.2% and 13.9% of pretax income of our insurance business of $69,857, $26,948 and $37,030 in each year, and 3.1%, 12.4% and 18.7% of the opening net liability for losses and loss adjustment expenses of $83,945, $43,881 and $27,615, as of January 1 of each year.

Based upon our internal analysis and our review of the statement of actuarial opinions provided by our actuarial consultants, we believe that the amounts recorded for policy liabilities and unpaid claims reasonably represent the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

Incurred and Paid Development

The following table presents information about incurred and paid loss development and average claim duration as of December 31, 2021, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. The cumulative number of reported claims represents open claims, claims closed with payment, and claims closed without payment. It does not include an estimated count of unreported claims. The number of claims is measured by claim event. The Company considers a claim that does not result in a liability as a claim closed without payment. In 2020 and 2021, timing effects related to the COVID 19 pandemic impacted claim activity and, consequently, the duration of paid claims relative to incurred losses. We believe these impacts are temporary and do not reflect a long term fundamental change in duration or the relationship between paid claims and incurred losses.
Incurred Losses and Allocated Loss Adjustment Expenses, Net of ReinsuranceAs of December 31, 2021
For the Years Ended December 31,Total of IBNR Liabilities Plus Expected Development of Reported ClaimsCumulative Number of Reported Claims
Accident Year2016
(Unaudited)		2017
(Unaudited)		2018
(Unaudited)		2019
(Unaudited)		2020
(Unaudited)		2021
2016$84,178 $87,290 $87,993 $88,615 $89,629 $89,981 $39 257 
2017103,306 104,898 105,601 105,787 106,446 $— 326 
2018129,352 133,225 133,158 134,392 $17,195 399 
2019144,925 149,166 151,772 $8,852 403 
2020172,007 169,706 $30,661 330 
2021250,300 59,994 473
Total$902,597 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year2016
(Unaudited)		2017
(Unaudited)		2018
(Unaudited)		2019
(Unaudited)		2020
(Unaudited)		2021
201662,989 $84,185 $86,531 $88,482 $88,976 $89,474 
201784,493 102,620 105,075 105,852 106,402 
2018105,740 112,619 114,490 115,407 
2019122,348 128,787 132,747 
2020127,721 129,832 
2021174,334 
Total$748,196 
All outstanding liabilities before 2016, net of reinsurance11 
Liabilities for loss and loss adjustment expenses, net of reinsurance$154,412 
Duration

The following table presents supplementary information about average historical claims duration as of December 31, 2021 for short duration contracts:

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Years123456
Short duration75.6%10.3%2.2%1.2%0.5%0.6%

Reconciliation of Reserves to Balance Sheet

The following table presents a reconciliation of net outstanding liabilities for unpaid loss and loss adjustment expenses of short-duration contracts to the consolidated balance sheets value of policy liabilities and unpaid claims:
As of
December 31, 2021
Net outstanding liabilities:
Short duration$154,412 
Insurance lines other than short duration576 
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance154,988 
Reinsurance recoverable on unpaid losses and loss adjustment expenses:
Short duration165,129 
Total reinsurance recoverable on unpaid losses and loss adjustment expenses165,129 
Total gross liability for unpaid losses and loss adjustment expenses320,117 
Liabilities of policy-holder account balances, gross801 
Non-insurance warranty benefit claim liabilities10,785 
Total policy liabilities and unpaid claims$331,703