POLICY AND CLAIM RESERVES

9 Months Ended

Sep. 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)	Nine months ended September 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		30,393		38,477
Estimated claims and claim adjustment expenses for claims arising in prior years		(1,292)		(1,214)
Total increases		29,101		37,263
Claims and claim adjustment expense payments for claims arising in:
Current year		25,586		31,637
Prior years		3,768		4,531
Total payments		29,354		36,168
Net balance at end of period		6,603		8,045
Plus reinsurance recoverable on unpaid losses		12,378		2,778
Claims and claim adjustment expense reserves at end of period		$	18,981	$	10,823

Claims and claim adjustment expense reserves before reinsurance recoverable at September 30, 2021 were up significantly compared to beginning of year due to claims arising from Hurricane Ida in the third quarter of 2021. The estimate for claims arising in prior years was reduced $1,292,000 in 2021 (reduced $1,214,000 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 $342,000 at September 30, 2021 ($426,000 at December 31, 2020). These claims are a component of policy and contract claims which totaled $1,290,000 at September 30, 2021 ($1,309,000 at December 31, 2020).