POLICY AND CLAIM RESERVES

3 Months Ended

Mar. 31, 2022

POLICY AND CLAIM RESERVES 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,
		2022		2021
Summary of claims and claim adjustment expense reserves
Balance, beginning of year		$	8,930	$	10,177
Less reinsurance recoverable on unpaid losses		2,139		3,321
Net balances at beginning of year		6,791		6,856
Net losses:
Provision for claims and claim adjustment expenses for claims arising in current year		8,737		9,034
Estimated claims and claim adjustment expenses for claims arising in prior years		(995)		(1,078)
Total increases		7,742		7,956
Claims and claim adjustment expense payments for claims arising in:
Current year		4,922		5,280
Prior years		2,427		2,416
Total payments		7,349		7,696
Net balance at end of period		7,184		7,116
Plus reinsurance recoverable on unpaid losses		2,033		2,393
Claims and claim adjustment expense reserves at end of period		$	9,217	$	9,509

Claims and claim adjustment expense reserves before reinsurance recoverables at March 31, 2022 were down moderately compared to prior year primarily due to a reduction in spring storm activity. The estimate for claims arising in prior years was reduced $995,000 in 2022 (reduced $1,078,000 in 2021) 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 $398,000 at March 31, 2022 ($390,000 at December 31, 2021). These claims are a component of policy and contract claims which totaled $1,189,000 at March 31, 2022 ($1,210,000 at December 31, 2021).