Property and Casualty Unpaid Claims and Claim Expenses (Tables)

12 Months Ended

Dec. 31, 2018

Reconciliation of property and casualty unpaid claims and claim expenses

The end of the year gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets.



($ in thousands)	Years Ended December 31,
	2018			2017			2016
Property and Casualty segment
Gross reserves, beginning of year ⁽¹⁾	$	319,182		$	307,757		$	301,569
Less: reinsurance recoverables	57,409			61,199			50,332
Net reserves, beginning of year ⁽²⁾	261,773			246,558			251,237
Incurred claims and claim expenses:
Claims occurring in the current year	547,959			498,989			471,099
Decrease in estimated reserves for claims occurring in prior years ⁽³⁾	(300		)	(2,700		)	(7,000		)
Total claims and claim expenses incurred ⁽⁴⁾	547,659			496,289			464,099
Claims and claim expense payments for claims occurring during:
Current year	369,194			333,385			323,025
Prior years	162,783			147,689			145,753
Total claims and claim expense payments	531,977			481,074			468,778
Net reserves, end of year ⁽²⁾	277,455			261,773			246,558
Plus: reinsurance recoverables	89,725			57,409			61,199
Gross reserves, end of year ⁽¹⁾	$	367,180		$	319,182		$	307,757

____________________


⁽¹⁾	Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Life and Retirement of $29,534 thousand, $28,567 thousand and $22,131 thousand as of December 31, 2018, 2017 and 2016, respectively, in addition to Property and Casualty reserves.


⁽²⁾	Reserves net of anticipated reinsurance recoverables.


⁽³⁾	Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding the reserve development recorded in 2018, 2017 and 2016.

⁽⁴⁾

Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Life and Retirement of $89,901 thousand, $86,017 thousand, and $76,905 thousand for the years ended December 31, 2018, 2017 and 2016, respectively, in addition to Property and Casualty amounts.

Schedule of average annual percentage payout of incurred claims by age, also referred to as a history of claims duration

Below is the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration:



Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years	1		2		3		4		5		6		7		8		9	10
Homeowners	78.5	%	17.3	%	2.4	%	0.9	%	0.7	%	0.2	%	—		—		—	—
Auto liability	40.9	%	35.1	%	13.7	%	6.1	%	2.7	%	1.1	%	0.3	%	0.1	%	—	—
Auto physical damage	95.6	%	4.4	%	—		—		—		—		—		—		—	—

Schedule of Short-duration insurance contracts, claims development

The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, auto liability and auto physical damage. Conditions and trends that have affected the development of these reserves in the past will not necessarily reoccur in the future. It may not be appropriate to use this cumulative history in the projection of future performance.

The information about incurred and paid claims development for the years ended December 31, 2009 to 2017 is presented as unaudited supplementary information.



($ in thousands)
Homeowners
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
Years Ended December 31,																						As of December 31, 2018
																						Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims

Accident	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited			Unaudited		Unaudited
Year	2009		2010		2011		2012		2013		2014		2015			2016		2017		2018

2009	$	113,274	$	112,280	$	112,970	$	113,096	$	113,357	$	113,230	$	113,216		$	112,900	$	112,958	$	113,168	$	—	21,810
2010			140,994		136,907		133,358		133,235		133,216		133,136			132,859		132,905		132,627		—		25,149
2011					150,141		150,334		150,791		148,860		148,755			148,414		148,370		148,079		—		29,530
2012							108,754		109,156		109,360		106,486			106,308		106,348		106,000		—		21,578
2013									105,584		107,489		103,982			102,407		102,345		101,769		88		19,221
2014											111,647		113,505			109,059		106,844		106,554		257		20,083
2015													111,706			115,134		114,404		114,053		362		18,706
2016																115,931		118,604		117,009		724		19,830
2017																		126,285		129,818		759		19,741
2018																				166,793		27,697		19,515
																		Total		$	1,235,870


($ in thousands)
Homeowners
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
Years Ended December 31,
Accident	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited			Unaudited		Unaudited
Year	2009		2010		2011		2012		2013		2014		2015			2016		2017		2018

2009	$	81,570	$	104,407	$	108,217	$	110,324	$	112,554	$	112,720	$	112,827		$	112,848	$	112,851	$	112,858
2010			98,190		124,326		129,790		132,246		132,523		132,604			132,599		132,602		132,602
2011					123,046		142,846		145,852		146,908		147,451			148,026		148,014		148,069
2012							84,260		101,566		104,203		105,156			105,561		105,909		105,993
2013									76,890		96,599		99,361			100,968		101,527		101,677
2014											83,314		103,030			105,704		106,081		106,258
2015													90,704			109,303		111,882		113,321
2016																95,772		113,186		115,053
2017																		106,800		128,518
2018																				130,548
																Total				1,194,897
															Outstanding prior to 2009					66
															Prior years paid					—
															Liabilities for claims and claim adjustment expenses, net of reinsurance					$	41,039



($ in thousands)
Auto Liability
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
Years Ended December 31,																						As of December 31, 2018
																						Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims			Cumulative Number of Reported Claims

Accident	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited			Unaudited		Unaudited
Year	2009		2010		2011		2012		2013		2014		2015			2016		2017		2018

2009	$	159,934	$	158,703	$	153,662	$	157,941	$	151,418	$	150,919	$	150,568		$	149,822	$	149,888	$	149,807	$	(64	)	49,230
2010			157,712		160,058		156,369		154,222		152,483		151,653			149,818		149,425		149,542		3			48,942
2011					150,803		146,713		145,735		143,133		142,488			139,840		138,891		138,949		210			45,976
2012							156,448		153,815		150,336		149,346			147,594		145,847		145,620		305			45,984
2013									153,860		152,858		150,720			150,657		148,111		147,993		748			47,368
2014											155,105		157,249			158,470		159,937		159,794		1,887			49,380
2015													165,517			172,553		177,021		178,325		2,441			50,596
2016																180,380		184,440		184,567		5,637			51,934
2017																		187,983		188,756		19,007			48,587
2018																				200,314		71,139			43,522
																		Total		$	1,643,667


($ in thousands)
Auto Liability
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
Years Ended December 31,
Accident	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited			Unaudited		Unaudited
Year	2009		2010		2011		2012		2013		2014		2015			2016		2017		2018

2009	$	60,011	$	110,921	$	133,568	$	142,524	$	146,383	$	148,783	$	149,608		$	149,801	$	149,855	$	149,871
2010			63,416		118,345		137,012		144,255		147,337		148,751			149,247		149,364		149,439
2011					61,070		108,837		126,812		133,931		136,906			138,151		138,358		138,689
2012							61,279		109,574		127,185		138,641			142,916		144,622		145,121
2013									62,224		108,856		131,214			139,954		145,291		146,770
2014											61,329		117,468			139,463		149,059		155,758
2015													70,836			134,473		157,980		170,088
2016																73,073		140,901		166,815
2017																		70,682		139,531
2018																				77,528
																Total				1,439,610
															Outstanding prior to 2009					183
															Prior years paid					—
															Liabilities for claims and claim adjustment expenses, net of reinsurance					$	204,240



($ in thousands)
Auto Physical Damage
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
Years Ended December 31,																						As of December 31, 2018
																						Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims			Cumulative Number of Reported Claims

Accident	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited			Unaudited		Unaudited
Year	2009		2010		2011		2012		2013		2014		2015			2016		2017		2018

2009	$	84,539	$	83,515	$	83,202	$	82,635	$	82,000	$	81,986	$	81,972		$	81,963	$	81,972	$	81,941	$	—		77,449
2010			84,112		83,420		83,103		83,046		83,052		83,050			83,036		83,028		83,018		2			81,581
2011					86,205		85,507		86,023		85,120		85,143			85,116		85,108		85,102		8			80,803
2012							83,770		82,337		83,402		83,431			83,354		83,342		83,334		8			78,163
2013									91,448		88,856		88,672			88,627		88,455		88,525		54			80,919
2014											95,572		95,634			95,422		95,239		95,232		(21		)	87,899
2015													99,291			97,994		97,624		97,455		(188		)	87,491
2016																112,430		109,515		109,348		(207		)	93,200
2017																		115,483		111,798		924			91,160
2018																				109,040		(6,859		)	91,070
																		Total		$	944,793


($ in thousands)
Auto Physical Damage
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
Years Ended December 31,
Accident	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited			Unaudited		Unaudited
Year	2009		2010		2011		2012		2013		2014		2015			2016		2017		2018

2009	$	78,456	$	82,117	$	82,039	$	82,015	$	82,000	$	81,985	$	81,973		$	81,963	$	81,955	$	81,941
2010			79,329		83,120		83,103		83,087		83,067		83,051			83,036		83,028		83,015
2011					83,227		85,254		85,181		85,148		85,127			85,116		85,108		85,095
2012							80,519		83,418		83,372		83,355			83,347		83,342		83,326
2013									85,110		88,688		88,580			88,532		88,484		88,471
2014											88,939		95,444			95,266		95,256		95,258
2015													92,138			97,850		97,685		97,638
2016																106,459		109,686		109,536
2017																		105,156		110,817
2018																				103,559
																Total				938,656
															Outstanding prior to 2009					—
															Prior years paid					—
															Liabilities for claims and claim adjustment expenses, net of reinsurance					$	6,137

Schedule of reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses

The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the Consolidated Balance Sheet is as follows:



($ in thousands)	Years Ended December 31,
	2018
Property and Casualty segment
Net reserves
Homeowners	$	41,039
Auto liability	204,240
Auto physical damage	6,137
Other short duration lines	3,556
Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance	254,972

Reinsurance recoverable on unpaid claims
Homeowners	26,646
Auto liability	55,971
Other short duration lines	7,108
Total reinsurance recoverable on unpaid claims	89,725

Insurance lines other than short duration ⁽¹⁾	29,534
Unallocated claims adjustment expenses	22,483
Total other than short duration and unallocated claims adjustment expenses	52,017

Gross reserves, end of year ⁽¹⁾	$	396,714

____________________

⁽¹⁾

This line includes Retirement and Life reserves as included in the Consolidated Balance Sheet.