Loss Reserves (Tables)

3 Months Ended

Mar. 31, 2019

Reconciliation of beginning and ending loss reserves

Table 11.1 provides a reconciliation of beginning and ending loss reserves as of and for the three months ended March 31, 2019 and 2018.



Development of reserves for losses and loss adjustment expenses
Table	11.1
		Three Months Ended March 31,
(In thousands)		2019			2018
Reserve at beginning of period		$	674,019		$	985,635
Less reinsurance recoverable		33,328			48,474
Net reserve at beginning of period		640,691			937,161

Losses incurred:
Losses and LAE incurred in respect of delinquency notices received in:
Current year		47,488			59,070
Prior years ⁽¹⁾		(8,425		)	(35,220		)
Total losses incurred		39,063			23,850

Losses paid:
Losses and LAE paid in respect of delinquency notices received in:
Current year		—			95
Prior years		56,365			81,983
Reinsurance terminations		—			236
Total losses paid		56,365			82,314
Net reserve at end of period		623,389			878,697
Plus reinsurance recoverables		31,875			45,474
Reserve at end of period		$	655,264		$	924,171


⁽¹⁾	A negative number for prior year losses incurred indicates a redundancy of prior year loss reserves. See the following table for more information about prior year loss development.

Prior year development of the reserves

The prior year development of the reserves in the first three months of 2019 and 2018 is reflected in table 11.2 below.



Reserve development on previously received delinquencies
Table	11.2
		Three Months Ended March 31,
(In millions)		2019			2018
Decrease in estimated claim rate on primary defaults		$	(31	)	$	(47	)
Increase in estimated severity on primary defaults		—			16
Change in estimates related to pool reserves, LAE reserves, reinsurance, and other		23			(4		)
Total prior year loss development ⁽¹⁾		$	(8	)	$	(35	)


⁽¹⁾	A negative number for prior year loss development indicates a redundancy of prior year loss reserves.

Rollforward of primary delinquent inventory

A rollforward of our primary delinquent inventory for the three months ended March 31, 2019 and 2018 appears in table 11.3 below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the accuracy of the data provided by servicers, the number of business days in a month, transfers of servicing between loan servicers and whether all servicers have provided the reports in a given month.



Delinquent inventory rollforward
Table	11.3
		Three Months Ended March 31,
		2019		2018
Delinquent inventory at beginning of period		32,898		46,556
New notices		13,611		14,623
Cures		(14,348	)	(18,073	)
Paid claims		(1,188	)	(1,571	)
Rescissions and denials		(52	)	(68	)
Other items removed from inventory		—		(224	)
Delinquent inventory at end of period		30,921		41,243

Aging of the primary delinquent inventory

Table 11.4 below shows the number of consecutive months a borrower is delinquent.



Primary delinquent inventory - consecutive months delinquent
Table	11.4
		March 31, 2019		December 31, 2018		March 31, 2018
3 months or less		8,568		9,829		8,770
4-11 months		9,997		9,655		16,429
12 months or more ⁽¹⁾		12,356		13,414		16,044
Total		30,921		32,898		41,243

3 months or less		28	%	30	%	21	%
4-11 months		32	%	29	%	40	%
12 months or more		40	%	41	%	39	%
Total		100	%	100	%	100	%

Primary claims received inventory included in ending delinquent inventory:		665		809		819


⁽¹⁾	Approximately 38%, 38%, and 44% of the primary delinquent inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of March 31, 2019, December 31, 2018, and March 31, 2018, respectively.