Policy Liabilities and Short Duration Contracts

12 Months Ended

Dec. 31, 2021

Insurance [Abstract]

Policy Liabilities and Short Duration Contracts

Various assumptions used to determine the future policy benefit reserves of life insurance include valuation interest rates, mortality assumptions and withdrawals.

The following table presents information on changes in the liability for life, accident and health and property policy and contract claims for the years ended December 31, 2021, 2020 and 2019.

Years ended December 31, (In thousands)	2021		2020	2019
Policy claims payable:
Balance at January 1	$	13,206	8,059	7,614
Less:  reinsurance recoverable	3,012		796	511
Net balance at January 1	10,194		7,263	7,103
Add claims incurred, related to:
Current year	32,595		38,400	26,816
Prior years(1)	1,052		195	543
	33,647		38,595	27,359
Deduct claims paid, related to:
Current year	23,369		29,767	20,629
Prior years	8,351		5,897	6,570
	31,720		35,664	27,199
Net balance December 31	12,121		10,194	7,263
Plus:  reinsurance recoverable	2,469		3,012	796
Balance at December 31	$	14,590	13,206	8,059
(1) This line is primarily impacted by the level of claim resolutions in the period compared to that which is expected by the reserve assumption. A positive number implies an unfavorable result where claim resolutions were less favorable than assumed while a negative number implies a favorable result compared to assumptions. Our claim assumptions will vary from actual experience in any one period, either favorably or unfavorably.

SHORT DURATION CONTRACTS

The Company's short duration contracts consist of credit life and credit disability in the Life Insurance segment and property insurance in the Home Service Insurance segment. The credit insurance lines are an immaterial part of short duration contracts so the following disclosures cover only the property insurance line of business in the Home Service Insurance segment.

Special Property Insurance (Allied and Fire)

The following table presents incurred claims development as of December 31, 2021, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts. This information is presented for the last five years as these claims rarely pay out over a longer period of time.

								As of December 31, 2021
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance							Total of Incurred but Not Reported Liabilities Plus Expected Development on Reported Claims	Cumulative Number of Reported Claims
	For the Years Ended December 31,
($ In thousands)	2017		2018	2019	2020	2021
Accident Year:	(Unaudited)
2017	$	1,507	1,451	1,406	1,407	1,417		—	664
2018			1,542	1,427	1,432	1,436		—	496
2019				1,549	1,150	1,161		4	588
2020					2,598	2,670		5	2,290
2021						2,087		561	1,875
Total						$	8,771

The following table presents paid claims development as of December 31, 2021, net of reinsurance.

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Years ended December 31,
(In thousands)	2017		2018	2019	2020	2021
Accident Year:	(Unaudited)
2017	$	1,359	1,652	1,661	1,661	1,661
2018			1,507	1,618	1,623	1,623
2019				1,328	1,254	1,274
2020					2,154	2,798
2021						1,442
Total						$	8,798
All outstanding liabilities before 2017, net of reinsurance						$	—
Liabilities for claims and claim adjustment expenses, net of reinsurance						$	796

The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated balance sheets are as follows:

As of December 31, (In thousands)	2021		2020
Net outstanding liabilities:
Special property	$	796	743
Other short duration insurance lines	253		214
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance	1,049		957
Reinsurance recoverable on unpaid claims:
Special property	2,083		2,955
Other short duration insurance lines	386		57
Total reinsurance recoverable on unpaid claims	2,469		3,012
Insurance lines other than short duration	11,072		9,237
Total gross liability for unpaid claims and claim adjustment expense	$	14,590	13,206

The following is supplementary information to the consolidated financial statements about average historical claims duration as of December 31, 2021.

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Years	1		2		3		4		5
Special property	93.00	%	11.54	%	0.90	%	—	%	—	%