1.
|
We note the activity in the reserves for losses and loss expenses on page 49 present a favorable development of $550 thousand for prior years losses and loss expenses;
however, the four tables that you present on pages 50-53 appear to depict unfavorable development of approximately $1.9 million for the prior years provision of losses and loss expenses. We also note that the objective of the short-duration
disclosures as outlined in paragraph BC 2 of ASU 2015-09 is to provide financial statement users with information to facilitate analysis of the amount, timing, and uncertainty of cash flows arising from insurance contracts and the
development of loss reserve estimates. Please address the following:
|
•
|
Explain to us, and revise your disclosure on page 49 in future filings to provide a more granular discussion, the differences relating the favorable/unfavorable assessment
above. It might be useful to provide a reconciliation to support your discussion.
|
2019
|
2018
|
2017
|
||||||||||
Reserves, gross of reinsurance recoverable, at the beginning of the year
|
$
|
865,339
|
$
|
680,274
|
$
|
576,330
|
||||||
Reinsurance recoverable on unpaid losses at the beginning of the year
|
375,935
|
308,143
|
251,563
|
|||||||||
Reserves at the beginning of the year
|
489,404
|
372,131
|
324,767
|
|||||||||
Provision for losses and loss expenses:
|
||||||||||||
Claims occurring during the current year
|
349,018
|
329,078
|
228,303
|
|||||||||
Claims occurring during prior years
|
(550
|
)
|
16,786
|
19,215
|
||||||||
Total incurred losses and loss expenses
|
348,468
|
345,864
|
247,518
|
|||||||||
Loss and loss expense payments:
|
||||||||||||
Claims occurring during the current year
|
90,364
|
84,738
|
67,234
|
|||||||||
Claims occurring during prior years
|
157,508
|
143,853
|
132,920
|
|||||||||
Total paid
|
247,872
|
228,591
|
200,154
|
|||||||||
Reserves at the end of the year
|
590,000
|
489,404
|
372,131
|
|||||||||
Reinsurance recoverable on unpaid losses at the end of the year
|
398,305
|
375,935
|
308,143
|
|||||||||
Reserves, gross of reinsurance recoverable, at the end of the year
|
$
|
988,305
|
$
|
865,339
|
$
|
680,274
|
Prior Year Savings/(Deficiency)
|
||||||||||||
2019
|
2018
|
2017
|
||||||||||
Workers' Compensation
|
$
|
(2,733
|
)
|
$
|
(9,601
|
)
|
$
|
(931
|
)
|
|||
Commercial Auto Liability
|
8,893
|
32,342
|
14,126
|
|||||||||
Physical Damage
|
(4,561
|
)
|
(1,066
|
)
|
(1,496
|
)
|
||||||
Professional Liability Assumed
|
259
|
2,343
|
5,704
|
|||||||||
Other short duration contracts
|
(2,408
|
)
|
(7,232
|
)
|
1,812
|
|||||||
Total
|
$
|
(550
|
)
|
$
|
16,786
|
$
|
19,215
|
Prior Accident Year
|
||||||
Deficiency / (Savings)
|
||||||
Workers' Compensation
|
$
|
(2,733
|
)
|
|
||
Commercial Auto Liability
|
8,893
|
|||||
Physical Damage
|
(4,561
|
)
|
||||
Professional Liability Assumed
|
259
|
|||||
Total of triangles in Form 10-K
|
1,858 |
|||||
Other short duration contracts (see below for detailed breakout)
|
(2,408
|
)
|
||||
$
|
(550
|
)
|
ties to Note C
|
|||
Assumed Property
|
$
|
(1,001
|
)
|
Run-off line
|
||
Direct Professional Liability
|
(434
|
)
|
Run-off line
|
|||
Personal Auto Liability
|
(242
|
)
|
Run-off line
|
|||
Surety
|
(231
|
)
|
|
|||
Commercial Multi-peril
|
(204
|
)
|
Run-off line
|
|||
Cargo
|
(161
|
)
|
|
|||
All other/ULAE
|
(135
|
)
|
||||
$
|
(2,408
|
)
|
% of Open Reserves Covered by Triangles
|
% of Incurred Loss Covered by Triangles
|
|||||||
Workers' Compensation
|
27
|
%
|
19
|
%
|
||||
Commercial Auto Liability
|
63
|
%
|
62
|
%
|
||||
Physical Damage
|
2
|
%
|
15
|
%
|
||||
Professional Liability Assumed
|
3
|
%
|
0
|
%
|
||||
Total of Triangles in Note C
|
95
|
%
|
96
|
%
|
||||
Other short duration contracts
|
5
|
%
|
4
|
%
|
||||
100
|
%
|
100
|
%
|
•
|
Explain to us the lines of business not included in the tables and quantify the prior year development for those lines in 2019.
|
•
|
Explain why you do not include the lines of business identified in the preceding bullet in your tables, and provide your consideration for disclosing
such information.
|
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