POLICY AND CLAIM RESERVES

6 Months Ended

Jun. 30, 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)	Six months ended June 30,
		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		19,571		25,956
Estimated claims and claim adjustment expenses for claims arising in prior years		(907)		(544)
Total increases		18,664		25,412
Claims and claim adjustment expense payments for claims arising in:
Current year		15,321		21,320
Prior years		3,329		3,889
Total payments		18,650		25,209
Net balance at end of period		6,870		7,153
Plus reinsurance recoverable on unpaid losses		1,809		230
Claims and claim adjustment expense reserves at end of period		$	8,679	$	7,383

Claims and claim adjustment expense reserves before reinsurance recoverable at June 30, 2021 were down significantly compared to beginning of year due to a decline in claims outstanding stemming from hurricane activity in the third and fourth quarter of 2020. The estimate for claims arising in prior years was reduced $907,000 in 2021 (reduced $544,000 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 $384,000 at June 30, 2021 ($426,000 at December 31, 2020). These claims are a component of policy and contract claims which totaled $1,029,000 at June 30, 2021 ($1,309,000 at December 31, 2020).