Reserves for Claims

12 Months Ended

Dec. 31, 2023

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

Reserves for Claims

Reserve for Claims

Changes in the reserve for claims for the years ended December 31 are summarized as follows based on the year in which the policies were written:

(in thousands)	2023		2022
Balance, beginning of period	$	37,192	$	36,754
Provision related to:
Current year	7,547		9,817
Prior years	(2,785)		(5,562)
Total provision charged to operations	4,762		4,255
Claims paid, net of recoveries, related to:
Current year	(428)		(333)
Prior years	(4,379)		(3,484)
Total claims paid, net of recoveries	(4,807)		(3,817)
Balance, end of year	$	37,147	$	37,192

The Company continually refines its reserve estimates as current loss experience develops and more credible data emerges. Movements in the reserve related to prior periods were primarily the result of changes to estimates to better reflect the latest reported loss data. The increase in the provision for claims in 2023, compared to 2022, is primarily related to less favorable loss development and higher incurred claims in the current period. Due to variances between actual and expected loss payments, loss development is subject to significant variability.

The Company does not recognize claim recoveries until an actual payment has been received by the Company. The Company realized claim recoveries of approximately $597 thousand and $1.0 million during 2023 and 2022, respectively.

The provision for claims as a percentage of net premiums written was 2.8% and 1.7% in 2023 and 2022, respectively.

A large claim is defined as a claim with incurred losses exceeding $500 thousand. Due to the small volume of large claims, the long-tail nature of title insurance claims and the inherent uncertainty in loss emergence patterns, large claim activity can vary significantly between policy years. The estimated development of large claims by policy year is therefore subject to significant changes as experience develops.

A summary of the Company’s reserve for claims, broken down into its components of known title claims and IBNR, follows:

(in thousands, except percentages)	2023		%	2022		%
Known title claims	$	2,855	7.7	$	3,250	8.7
IBNR	34,292		92.3	33,942		91.3
Total reserve for claims	$	37,147	100.0	$	37,192	100.0

In management’s opinion, the reserve for claims is adequate to cover claims losses which might result from pending and future claims.