Loss Reserves (Tables)

3 Months Ended

Mar. 31, 2022

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, 2022 and 2021.


Development of reserves for losses and loss adjustment expenses
Table	11.1
		Three Months Ended March 31,
(In thousands)		2022		2021
Reserve at beginning of period		$	883,522	$	880,537
Less reinsurance recoverable		66,905		95,042
Net reserve at beginning of period		816,617		785,495

Losses incurred:
Losses and LAE incurred in respect of delinquency notices received in:
Current year		36,344		41,425
Prior years (1)		(55,658)		(1,789)
Total losses incurred		(19,314)		39,636

Losses paid:
Losses and LAE paid in respect of delinquency notices received in:
Current year		—		—
Prior years		10,748		14,922

Total losses paid		10,748		14,922
Net reserve at end of period		786,555		810,209
Plus reinsurance recoverable		64,717		102,901
Reserve at end of period		$	851,272	$	913,110

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

Prior year development of the reserves

The prior year loss reserve development in the first three months of 2022 and 2021 is reflected in table 11.2 below.


Reserve development on previously received delinquencies
Table	11.2
		Three Months Ended March 31,
(In thousands)		2022		2021
Increase (decrease) in estimated claim rate on primary defaults		$	(55,777)	$	87
Increase (decrease) in estimated severity on primary defaults		(2,172)		59
Change in estimates related to pool reserves, LAE reserves, reinsurance, and other		2,291		(1,935)
Total prior year loss development (1)		$	(55,658)	$	(1,789)

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

Rollforward of primary delinquent inventory

A rollforward of our primary delinquency inventory for the three months ended March 31, 2022 and 2021 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 number of business days in a month and transfers of servicing between loan servicers.


Delinquency inventory rollforward
Table	11.3
		Three Months Ended March 31,
		2022	2021
Delinquency inventory at beginning of period		33,290	57,710
New notices		10,703	13,011
Cures		(13,200)	(17,628)
Paid claims		(322)	(312)
Rescissions and denials		(9)	(6)

Delinquency inventory at end of period		30,462	52,775

Aging of the primary delinquent inventory

Table 11.4 below shows the number of consecutive months a borrower is delinquent. Historically as a delinquency ages it is more likely to result in a claim.


Primary delinquency inventory - consecutive months delinquent
Table	11.4
		March 31, 2022		December 31, 2021		March 31, 2021
3 months or less		7,382		7,586		9,194
4-11 months		8,131		7,990		29,832
12 months or more (1)		14,949		17,714		13,749
Total		30,462		33,290		52,775
3 months or less		24	%	23	%	17	%
4-11 months		27	%	24	%	57	%
12 months or more		49	%	53	%	26	%
Total		100	%	100	%	100	%
Primary claims received inventory included in ending delinquent inventory		217		211		151

(1)Approximately 23%, 20%, and 26% of the primary delinquency inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of March 31, 2022, December 31, 2021, and March 31, 2021, respectively.