Allowance for Uncollectible Premiums Receivable (Notes)

9 Months Ended

Sep. 30, 2021

Allowance for Uncollectible Premiums Receivable Note [Text Block]

Premiums Receivable

The following table provides a roll forward of the allowance for credit losses on our premiums receivable balance for the periods indicated:


	Quarter ended September 30,				Nine Months ended September 30,
($ in thousands)	2021		2020		2021		2020
Balance at beginning of period	$	18,300	$	21,000	$	21,000	$	6,400
Cumulative effect adjustment1	—		—		—		1,058
Balance at beginning of period, as adjusted	$	18,300	$	21,000	$	21,000	$	7,458
Current period provision for expected credit losses	180		802		1,721		16,369

Write-offs charged against the allowance for credit losses	(2,154)		(996)		(6,554)		(3,272)
Recoveries	174		194		333		445
Allowance for credit losses, end of period	$	16,500	$	21,000	$	16,500	$	21,000

1Represents the impact of our adoption of ASU 2016-13, Financial Instruments - Credit Losses.

In Nine Months 2020, we recognized an additional allowance for credit losses of $13.5 million, net of write-offs and recoveries. We based this increase on an evaluation of the recoverability of our premiums receivable in light of (i) the billing accommodations we announced during the first quarter of 2020 and (ii) the impact of certain state regulations that provided for deferral of payments without cancellation for a period up to 90 days and increased earned but uncollected premiums. The billing accommodations included individualized payment flexibility and suspending the effect of policy cancellations, late payment notices, and late or reinstatement fees. The heightened credit risk experienced in 2020 led us to increase the allowance for credit losses to $21.0 million last year. During Nine Months 2021, we realized a portion of the anticipated write-offs, which reduced our allowance. The reduction was partially offset by the additional provision established on current-year premiums, which resulted in the end of period allowance of $16.5 million.