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Loss And Loss Adjustment Expense Reserves
 12 Months Ended
Dec. 31, 2020
Insurance Loss Reserves [Abstract]  
Loss And Loss Adjustment Expense Reserves Loss and Loss Adjustment Expense Reserves
The following table presents the activity in loss and loss adjustment expense reserves:
 Year Ended December 31,
 202020192018
 (Amounts in thousands)
Gross reserves at January 1$1,921,255 $1,829,412 $1,510,613 
Reinsurance recoverables on unpaid losses(76,100)(180,859)(64,001)
             Cumulative effect of adopting ASU 2016-13 149 — — 
Reinsurance recoverables on unpaid losses, as adjusted(75,951)(180,859)(64,001)
Net reserves at January 1, as adjusted1,845,304 1,648,553 1,446,612 
Incurred losses and loss adjustment expenses related to:
Current year2,372,364 2,696,230 2,483,693 
Prior years22,979 9,794 93,096 
Total incurred losses and loss adjustment expenses2,395,343 2,706,024 2,576,789 
Loss and loss adjustment expense payments related to:
Current year1,366,661 1,651,550 1,543,828 
Prior years937,142 857,872 831,020 
Total payments2,303,803 2,509,422 2,374,848 
Net reserves at December 311,936,844 1,845,155 1,648,553 
Reinsurance recoverables on unpaid losses54,460 76,100 180,859 
Gross reserves at December 31$1,991,304 $1,921,255 $1,829,412 

The increase in the provision for insured events of prior years in 2020 of approximately $23.0 million primarily resulted from higher than estimated losses and loss adjustment expenses in the homeowners and commercial automobile lines of insurance business, partially offset by favorable development in the private passenger automobile line of insurance business.

The increase in the provision for insured events of prior years in 2019 of approximately $9.8 million primarily resulted from higher than estimated defense and cost containment expenses in the California automobile line of insurance business, partially offset by favorable development in certain of the Company's other lines of insurance business.
The increase in the provision for insured events of prior years in 2018 of approximately $93.1 million primarily resulted from higher than estimated California automobile losses resulting from severity in excess of expectations for bodily injury claims as well as higher than estimated defense and cost containment expenses in the California automobile line of insurance business.

The Company recorded catastrophe losses net of reinsurance of approximately $64 million, $53 million, and $67 million in 2020, 2019, and 2018, respectively. Catastrophe losses due to the catastrophe events that occurred in 2020 totaled approximately $69 million, with no reinsurance benefits used for these losses, resulting primarily from wildfires and windstorms in California and extreme weather events outside of California. These losses were partially offset by favorable development of approximately $5 million on prior years' catastrophe losses. Catastrophe losses before reinsurance benefits totaled approximately $57 million in 2019, resulting primarily from wildfires and winter storms in California, a hurricane in Texas, and tornadoes and wind and hail storms in the Midwest. These losses were partially offset by favorable development of approximately $4 million on prior years' catastrophe losses. Catastrophe losses before reinsurance benefits totaled approximately $289 million in 2018, resulting primarily from wildfires in Northern and Southern California and weather-related catastrophes across several states.

During the first quarter of 2019, the Company completed the sale of its subrogation rights related to the 2018 Camp and Woolsey Fires and the 2017 Thomas Fire (which was a component of the "2017 Southern California fires") to a third party. The Company’s reinsurers were the primary beneficiaries of this transaction, as they had absorbed most of the losses under the terms of the Treaty. The Company re-estimated its gross and net losses from the 2018 Camp and Woolsey Fires and the 2017 Southern California fires in conjunction with this sale, and its total gross losses from these catastrophes, after accounting for the assignment of subrogation rights and adjustments made to claims reserves as part of normal reserving procedures, were approximately $208 million, and its total net losses, after reinsurance benefits, were approximately $40 million at March 31, 2019. The Company benefited by approximately $10 million, before taxes, in the first quarter of 2019 from the sale of the subrogation rights, including adjustments made to the associated claims as a result of normal reserving procedures, reductions in the Company's retained portion of losses on the Camp and Woolsey Fires, and reduced reinstatement premiums recognized.

The following is information about incurred and paid claims development as of December 31, 2020, 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 for our two major product lines: automobile and homeowners lines of business. As the information presented is for these two major product lines only, the total incurred and paid claims development shown below does not correspond to the aggregate development presented in the table above, which is for all product lines and includes unallocated claims adjustment expenses. The cumulative number of reported claims represents open claims, claims closed with payment, and claims closed without payment. It does not include an estimated amount for unreported claims. The number of claims is measured by claim event (such as a car accident or storm damage) and an individual claim event may result in more than one reported claim. The Company considers a claim that does not result in a liability as a claim closed without payment. 

The information about incurred and paid claims development for the years ended December 31, 2011 to 2019 is presented as unaudited supplementary information.
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Automobile Insurance)As of December 31, 2020
Total of Incurred But Not Reported Liabilities Plus Expected Development on Reported ClaimsCumulative Number of Reported Claims
Accident YearFor the Years Ended December 31,
2011(1)
2012(1)
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020
(Amounts in thousands)(Amounts in thousands)
2011$1,343,919 $1,367,000 $1,380,557 $1,388,363 $1,393,878 $1,398,518 $1,405,112 $1,401,178 $1,401,151 $1,401,543 $59 181
20121,424,754 1,408,222 1,409,104 1,414,878 1,426,735 1,436,034 1,438,250 1,439,660 1,440,537 116 181
20131,448,567 1,431,058 1,447,881 1,458,421 1,464,071 1,468,294 1,468,237 1,468,747 816 185
20141,467,175 1,454,366 1,473,545 1,486,322 1,498,504 1,501,075 1,501,713 718 180
20151,551,105 1,588,443 1,610,839 1,634,435 1,645,950 1,649,170 4,577 170
20161,672,853 1,669,642 1,713,696 1,731,997 1,732,410 8,206 155
20171,703,857 1,727,277 1,741,825 1,733,425 22,626 149
20181,781,817 1,773,502 1,785,071 60,829 146
20191,916,269 1,911,268 165,108 147
20201,514,551 407,969 85
Total$16,138,435 
__________ 
(1) The information for the years 2011 to 2019 is presented as unaudited supplemental information.

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Automobile Insurance)
For the Years Ended December 31,
Accident Year
2011(1)
2012(1)
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020
(Amounts in thousands)
2011$926,983 $1,152,459 $1,277,808 $1,347,082 $1,378,920 $1,391,101 $1,394,684 $1,400,441 $1,400,958 $1,401,592 
2012955,647 1,194,648 1,304,511 1,372,828 1,409,911 1,422,705 1,434,956 1,438,686 1,440,482 
2013974,445 1,217,906 1,340,724 1,413,999 1,447,004 1,460,352 1,464,277 1,466,356 
2014967,481 1,231,413 1,358,472 1,432,472 1,476,944 1,490,366 1,496,814 
20151,040,253 1,336,223 1,466,368 1,560,480 1,614,188 1,634,780 
20161,094,006 1,395,199 1,554,217 1,656,192 1,699,069 
20171,076,079 1,399,202 1,561,850 1,648,328 
20181,082,127 1,417,637 1,588,049 
20191,134,859 1,494,342 
2020825,398 
Total$14,695,210 
All outstanding liabilities before 2011, net of reinsurance(531)
Loss and allocated loss adjustment expense reserves, net of reinsurance$1,442,694 
__________ 
(1) The information for the years 2011 to 2019 is presented as unaudited supplemental information.
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Homeowners' Insurance)As of December 31, 2020
Total of Incurred But Not Reported Liabilities Plus Expected Development on Reported ClaimsCumulative Number of Reported Claims
Accident YearFor the Years Ended December 31,
2011(1)
2012(1)
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020
(Amounts in thousands)(Amounts in thousands)
2011$167,414 $170,623 $170,052 $169,600 $169,390 $169,621 $170,126 $170,334 $170,174 $170,402 $167 23
2012196,063 188,010 190,376 191,548 192,057 191,804 192,905 192,790 193,002 120 25
2013191,903 188,915 188,026 186,795 187,165 188,014 187,147 187,683 142 23
2014199,298 202,621 203,218 202,513 204,986 208,003 208,743 592 25
2015234,800 234,881 233,501 236,855 238,652 239,941 2,950 24
2016250,691 259,489 259,497 259,708 260,496 1,821 24
2017309,491 295,163 288,322 289,869 2,702 30
2018311,798 308,361 310,695 9,704 25
2019359,643 366,139 17,580 30
2020420,257 77,396 26
Total$2,647,227 
__________ 
(1) The information for the years 2011 to 2019 is presented as unaudited supplemental information.

Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Homeowners' Insurance)
For the Years Ended December 31,
Accident Year
2011(1)
2012(1)
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020
(Amounts in thousands)
2011$111,909 $153,845 $162,870 $166,375 $167,806 $168,621 $168,914 $169,757 $169,899 $169,958 
2012128,618 175,029 182,756 188,121 190,373 190,649 191,660 192,362 192,454 
2013133,528 174,295 180,858 183,860 185,168 186,132 186,494 186,816 
2014139,615 186,996 194,605 198,758 202,193 203,333 207,524 
2015163,196 213,994 224,178 230,480 234,683 235,971 
2016173,537 234,215 245,878 253,919 256,642 
2017217,900 269,254 278,341 283,311 
2018213,038 271,534 286,658 
2019240,240 324,953 
2020271,208 
Total$2,415,495 
All outstanding liabilities before 2011, net of reinsurance1,457 
Loss and allocated loss adjustment expense reserves, net of reinsurance$233,189 
__________ 
(1) The information for the years 2011 to 2019 is presented as unaudited supplemental information.

The following is unaudited supplementary information about average historical claims duration as of December 31, 2020.
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years12345678910
Automobile insurance62.6 %17.6 %8.7 %5.2 %2.6 %1.0 %0.5 %0.3 %0.1 %— %
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years12345678910
Homeowners insurance67.9 %21.9 %4.1 %2.3 %1.2 %0.4 %0.7 %0.3 %0.1 %— %
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 is as follows:

Reconciliation of the Disclosure of Incurred and Paid Claims Development
to the Loss and Loss Adjustment Expense Reserves
December 31, 2020
(Amounts in thousands)
Net outstanding liabilities
Automobile insurance$1,442,694 
Homeowners' insurance233,189 
WAIC automobile insurance13,903 
Other short-duration insurance lines130,291 
Loss and loss adjustment expense reserves, net of reinsurance recoverables on unpaid losses1,820,077 
Reinsurance recoverables on unpaid losses
Automobile insurance18,187 
Homeowners' insurance35,214 
Other short-duration insurance lines1,059 
Total reinsurance recoverables on unpaid losses54,460 
Insurance lines other than short-duration676 
Unallocated claims adjustment expenses116,091 
116,767 
Total gross loss and loss adjustment expense reserves$1,991,304