POLICY AND CLAIM RESERVES

3 Months Ended

Mar. 31, 2021

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,
		2021		2020
Summary of claims and claim adjustment expense reserves
Balance, beginning of year		$	10,177	$	7,199
Less reinsurance recoverable on unpaid losses		3,321		249
Net balances at beginning of year		6,856		6,950
Net losses:
Provision for claims and claim adjustment expenses for claims arising in current year		9,034		9,622
Estimated claims and claim adjustment expenses for claims arising in prior years		(1,078)		(32)
Total increases		7,956		9,590
Claims and claim adjustment expense payments for claims arising in:
Current year		5,280		6,856
Prior years		2,416		3,460
Total payments		7,696		10,316
Net balance at end of period		7,116		6,224
Plus reinsurance recoverable on unpaid losses		2,393		241
Claims and claim adjustment expense reserves at end of period		$	9,509	$	6,465

Claims and claim adjustment expense reserves before reinsurance recoverable at March 31, 2021 were up compared to the same period last year due to an increase in hurricane activity in the third and fourth quarter of 2020. The most significant event contributing to remaining claim reserves at December 31, 2020 was Hurricane Zeta which occurred in late October. The estimate for claims arising in prior years was reduced $1,098,000 in 2021 (reduced $32,000 in 2020) 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 $450,000 at March 31, 2021 ($426,000 at December 31, 2020). These claims are a component of policy and contract claims which totaled $1,222,000 at March 31, 2021 ($1,309,000 at December 31, 2020).