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v3.22.4

Losses and LAE (Tables) | 12 Months Ended
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Dec. 31, 2022
Insurance Loss Reserves [Abstract] |
Schedule of Losses and Loss Adjustment Expenses, by Segment | Our reserve for losses and LAE, at the end of each period indicated, consisted of the following.
Reserve for losses and LAE |  |  |  |
|  | December 31,
(In thousands) |  | 2022 |  | 2021
Primary case |  | $ | 398,874 |  |  | $ | 790,380 |
Primary IBNR and LAE |  | 12,169 |  |  | 22,745 |
Pool and other |  | 9,912 |  |  | 10,011 |
Mortgage insurance |  | 420,955 |  |  | 823,136 |
Title insurance |  | 5,888 |  |  | 5,506 |
Total reserve for losses and LAE |  | $ | 426,843 |  |  | $ | 828,642 |
Rollforward of Mortgage Insurance Reserve for Losses | For the periods indicated, the following table presents information relating to our mortgage insurance reserve for losses, including our IBNR reserve and LAE.
Rollforward of mortgage insurance reserve for losses |  |  |  |  |  |
|  | Years Ended December 31,
(In thousands) |  | 2022 |  | 2021 |  | 2020
Balance at beginning of year |  | $ | 823,136 |  |  | $ | 844,107 |  |  | $ | 401,273 |
Less: Reinsurance recoverable (1) |  | 66,676 |  |  | 71,769 |  |  | 14,594 |
Balance at beginning of year, net of reinsurance recoverable |  | 756,460 |  |  | 772,338 |  |  | 386,679 |
Add: Losses and LAE incurred in respect of default notices reported and unreported in: |  |  |  |  |  |
Current year (2) |  | 160,049 |  |  | 160,565 |  |  | 517,807 |
Prior years |  | (499,423) |  |  | (141,126) |  |  | (34,547) |
Total incurred |  | (339,374) |  |  | 19,439 |  |  | 483,260 |
Deduct: Paid claims and LAE related to: |  |  |  |  |  |
Current year (2) |  | 499 |  |  | 1,112 |  |  | 4,148 |
Prior years |  | 20,359 |  |  | 34,205 |  |  | 93,453 |
Total paid |  | 20,858 |  |  | 35,317 |  |  | 97,601 |
Balance at end of period, net of reinsurance recoverable |  | 396,228 |  |  | 756,460 |  |  | 772,338 |
Add: reinsurance recoverable (1) |  | 24,727 |  |  | 66,676 |  |  | 71,769 |
Balance at end of year |  | $ | 420,955 |  |  | $ | 823,136 |  |  | $ | 844,107 |
(1)Related to ceded losses recoverable, if any, on reinsurance transactions. See Note 8 for additional information. (2)Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default.
Schedule of Default to Claim Rates on Primary Portfolio | The following table shows our gross Default to Claim Rates on our primary portfolio based on the Time in Default and as of the dates indicated.
Default to Claim Rates
|  | December 31,
|  | 2022 |  | 2021 |  | 2020
Default to Claim Rate on: |  |  |  |  |  |
New defaults |  | 8.0 | % |  | 8.0 | % |  | 8.5 | %
Defaults not in Foreclosure Stage |  |  |  |  |  |
Time in Default: < 2 years (1) |  | 21.8 | % |  | 41.6 | % |  | 21.0 | %
Time in Default: 2 - 5 years |  | 65.0 | % |  | 75.0 | % |  | 62.5 | %
Time in Default: > 5 years |  | 70.0 | % |  | 80.0 | % |  | 70.0 | %
Foreclosure Stage Defaults |  | 75.0 | % |  | 85.0 | % |  | 75.0 | %
(1)Represents the weighted average Default to Claim Rate for all defaults not in foreclosure stage that have been in default for up to two years, including new defaults. The estimated Default to Claim Rates applied to defaults within this population vary by Time in Default, and range from the Default to Claim Rates on new defaults shown above, up to 55.0%, 80.1% and 55.0% for more aged defaults in this category as of December 31, 2022, 2021 and 2020, respectively.
Schedule of Net Incurred Losses and Paid Claims Development | The information about net incurred losses and paid claims development for the years ended prior to 2022 is presented as supplementary information.
Incurred losses, net of reinsurance
|  |  |  |  |  |  |  |  |  |  |  |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims (1) |  | Cumulative Number of Reported Defaults (2)
($ in thousands) | Years Ended December 31, |  |  |
|  | Unaudited |  |  |
Default Year |  | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |  | As of December 31, 2022
2013 |  | $ | 505,732 |  | $ | 405,334 |  | $ | 401,444 |  | $ | 404,333 |  | $ | 402,259 |  | $ | 400,243 |  | $ | 399,356 |  | $ | 399,317 |  | $ | 398,820 |  | $ | 397,207 |  |  | $ | 5 |  |  | 58,577 |
2014 |  |  | 337,784 |  | 247,074 |  | 265,891 |  | 264,620 |  | 260,098 |  | 261,507 |  | 261,377 |  | 260,254 |  | 257,773 |  |  | 6 |  |  | 47,976 |
2015 |  |  |  | 222,555 |  | 198,186 |  | 178,042 |  | 183,952 |  | 183,546 |  | 184,066 |  | 182,647 |  | 180,435 |  |  | 9 |  |  | 42,607 |
2016 |  |  |  |  | 201,016 |  | 165,440 |  | 149,753 |  | 148,811 |  | 148,640 |  | 148,349 |  | 145,267 |  |  | 14 |  |  | 40,503 |
2017 |  |  |  |  |  | 180,851 |  | 151,802 |  | 133,357 |  | 130,274 |  | 126,989 |  | 122,407 |  |  | 25 |  |  | 42,888 |
2018 |  |  |  |  |  |  | 131,513 |  | 116,634 |  | 95,534 |  | 88,252 |  | 75,262 |  |  | 32 |  |  | 37,369 |
2019 |  |  |  |  |  |  |  | 143,475 |  | 136,860 |  | 109,416 |  | 66,466 |  |  | 79 |  |  | 40,985 |
2020 |  |  |  |  |  |  |  |  | 504,160 |  | 408,809 |  | 87,213 |  |  | 193 |  |  | 108,025 |
2021 |  |  |  |  |  |  |  |  |  | 156,328 |  | 72,475 |  |  | 184 |  |  | 37,470 |
2022 |  |  |  |  |  |  |  |  |  |  | 155,908 |  |  | 1,550 |  |  | 37,738 |
Total |  |  |  |  |  |  |  |  |  |  | $ | 1,560,413 |  |  |  |  |
(1)Represents reserves as of December 31, 2022, related to IBNR liabilities. (2)Represents total number of new primary default notices received in each calendar year as compiled monthly based on reports received from loan servicers. As reflected in our Default to Claim Rate assumptions, a significant portion of reported defaults generally do not result in a claim. In certain instances, a defaulted loan may cure, and then re-default in a later period. Consistent with our reserving practice, each new event of default is treated as a unique occurrence and therefore certain loans that cure and re-default may be included as a reported default in multiple periods.
Cumulative paid claims, net of reinsurance
(In thousands) |  | Years Ended December 31, |  |
|  | Unaudited |  |
Default Year |  | 2013 |  | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022
2013 |  | $ | 34,504 |  |  | $ | 191,040 |  |  | $ | 307,361 |  |  | $ | 357,087 |  |  | $ | 379,036 |  |  | $ | 388,688 |  |  | $ | 392,818 |  |  | $ | 395,093 |  |  | $ | 395,292 |  |  | $ | 395,630 |
2014 |  |  |  | 13,108 |  |  | 115,852 |  |  | 200,422 |  |  | 233,607 |  |  | 246,611 |  |  | 252,619 |  |  | 255,742 |  |  | 256,107 |  |  | 255,981 |
2015 |  |  |  |  |  | 10,479 |  |  | 84,271 |  |  | 142,421 |  |  | 163,916 |  |  | 172,645 |  |  | 174,812 |  |  | 175,874 |  |  | 176,823 |
2016 |  |  |  |  |  |  |  | 11,061 |  |  | 76,616 |  |  | 119,357 |  |  | 134,115 |  |  | 137,306 |  |  | 138,525 |  |  | 139,539 |
2017 |  |  |  |  |  |  |  |  |  | 24,653 |  |  | 66,585 |  |  | 99,678 |  |  | 108,484 |  |  | 111,458 |  |  | 112,445 |
2018 |  |  |  |  |  |  |  |  |  |  |  | 5,584 |  |  | 36,066 |  |  | 54,625 |  |  | 60,926 |  |  | 62,968 |
2019 |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,220 |  |  | 18,703 |  |  | 28,896 |  |  | 35,594 |
2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,148 |  |  | 9,867 |  |  | 14,635 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,112 |  |  | 2,561 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 498 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1,196,674 |
All outstanding liabilities before 2013, net of reinsurance |  | 22,206 |
Liabilities for claims, net of reinsurance (1) |  | $ | 385,945 |
(1)Calculated as follows:
(In thousands) |  |
Incurred losses, net of reinsurance |  | $ | 1,560,413 |
All outstanding liabilities before 2013, net of reinsurance |  | 22,206 |
Cumulative paid claims, net of reinsurance |  | (1,196,674) |
Liabilities for claims, net of reinsurance |  | $ | 385,945 |
Reconciliation of Net Incurred Losses and Paid Claims Development to Mortgage Insurance Reserve for Losses and Loss Adjustment Expenses | The following table provides a reconciliation of the net incurred losses and paid claims development tables above to the mortgage insurance reserve for losses and LAE at December 31, 2022.
Net outstanding liabilities - mortgage insurance |  |
(In thousands) |  | December 31, 2022
Reserve for losses and LAE, net of reinsurance |  | $ | 385,945 |
Reinsurance recoverable on unpaid claims |  | 24,727 |
Unallocated LAE |  | 10,283 |
Total gross reserve for losses and LAE (1) |  | $ | 420,955 |
(1)Excludes title insurance reserve for losses and LAE of $5.9 million.
Schedule of Historical Claims Duration | The following is supplementary information about average historical claims duration as of December 31, 2022, representing the average distribution of when claims are paid relative to the year of default.
Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited)
Years |  | 1 |  | 2 |  | 3 |  | 4 |  | 5 |  | 6 |  | 7 |  | 8 |  | 9 |  | 10
Mortgage insurance |  | 6.8% |  | 30.0% |  | 24.5% |  | 10.4% |  | 3.8% |  | 1.5% |  | 0.9% |  | 0.4% |  | —% |  | 0.1%

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- Definition Tabular disclosure of the activity in the reserve for settling insured claims and expenses incurred in the claims settlement process for the period. The estimated liability includes the amount of money that will be required for future payments of (a) claims that have been reported to the insurer, (b) claims related to insured events that have occurred but that have not been reported to the insurer as of the date the liability is estimated, and (c) claim adjustment expenses. Claim adjustment expenses include costs incurred in the claim settlement process such as legal fees; outside adjuster fees; and costs to record, process, and adjust claims. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -Section 50 -Paragraph 3 -URI https://asc.fasb.org/extlink&oid=116884095&loc=d3e14764-158437 + Details
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