Unpaid Claims and Claim Expenses

9 Months Ended

Sep. 30, 2020

The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both a gross and net (after reinsurance) basis. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the period gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets.


($ in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Property and Casualty
Beginning gross reserves (1)	$	388,491	$	367,862	$	386,976	$	367,180
Less: reinsurance recoverables	116,083		77,345		120,506		89,725
Net reserves, beginning of period (2)	272,408		290,517		266,470		277,455
Incurred claims and claim expenses:
Claims occurring in the current period	125,622		122,470		340,243		375,648
Decrease in estimated reserves for claims occurring in prior periods (3)	(7,200)		(3,500)		(9,200)		(7,500)
Total claims and claim expenses incurred (4)	118,422		118,970		331,043		368,148
Claims and claim expense payments for claims occurring during:
Current period	91,008		101,499		195,891		230,968
Prior periods	19,280		29,747		121,080		136,394
Total claims and claim expense payments	110,288		131,246		316,971		367,362
Net reserves, end of period (2)	280,542		278,241		280,542		278,241
Plus: reinsurance recoverables	114,773		76,526		114,773		76,526
Ending gross reserves (1)	$	395,315	$	354,767	$	395,315	$	354,767

(1)Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Life and Retirement of $59.2 million and $57.5 million as of September 30, 2020 and 2019, 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.

(4)Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Life and Retirement of $33.0 million and $102.1 million for the three and nine months ended September 30, 2020, respectively, in addition to Property and Casualty amounts. Benefits, claims and settlement expenses for Supplemental, Life and Retirement were $35.2 million and $78.1 million for the three and nine months ended September 30, 2019, respectively.

Net favorable development of total reserves for Property and Casualty claims occurring in prior years was $9.2 million and $7.5 million for the nine months ended September 30, 2020 and 2019, respectively. The favorable development for the nine months ended September 30, 2020 was the result of favorable loss trends in automobile and homeowners loss emergence of $4.0 million for accident years 2019 and prior and $5.2 million of subrogation received largely related to the 2018 Camp Fire in California. The favorable development for the nine months ended September 30, 2019 was the result of favorable loss trends in automobile and homeowners loss emergence for accident years 2018 and prior.