POLICY AND CLAIM RESERVES

3 Months Ended

Mar. 31, 2020

The Company regularly updates its reserve estimates as new information becomes available and events occur that may impact the resolution of unsettled claims. Reserve estimation can be an inherently uncertain process and reserve estimates can be revised up or down depending on changes in circumstances. Changes in prior years' reserve estimates are reflected in the results of operations in the year such changes are determined.

The following table is a reconciliation of beginning and ending property and casualty reserve balances for claims and claim adjustment expense:



($ in thousands)	Three months ended March 31,
	2020			2019
Summary of claims and claim adjustment expense reserves
Balance, beginning of year	$	7,199		$	8,208
Less reinsurance recoverable on unpaid losses	249			1,384
Net balances at beginning of year	6,950			6,824
Net losses:
Provision for claims and claim adjustment expenses for claims arising in current year	9,622			8,585
Estimated claims and claim adjustment expenses for claims arising in prior years	(32		)	(604		)
Total increases	9,590			7,981
Claims and claim adjustment expense payments for claims arising in:
Current year	6,856			5,596
Prior years	3,460			2,510
Total payments	10,316			8,106
Net balance at end of period	6,224			6,699
Plus reinsurance recoverable on unpaid losses	241			1,264
Claims and claim adjustment expense reserves at end of period	$	6,465		$	7,963

Claims and claim adjustment expense reserves before reinsurance recoverable at March 31, 2020 were down compared to the same period last year. A combination of a reduction in incurred losses during the month of March of 2020 and an increase in payments on claims arising in the current year were the primary factors contributing to the decline in end of period claims and claim adjustment expense reserves at March 31, 2020 compared to March 31, 2019. The estimate for claims arising in prior years was reduced $32,000 in 2020 (reduced $604,000 in 2019) due to favorable loss development during the year on claims arising in prior years.

Accident and Health Claim Reserves

The Company, through its life insurance subsidiary, underwrites a limited number of short duration accident and health contracts. These claims are typically settled in three years or less and the reserve for unpaid claims totaled $432,000 at March 31, 2020 ($417,000 at December 31, 2019). These claims are a component of policy and contract claims which totaled $1,132,000 at March 31, 2020 ($1,053,000 at December 31, 2019).