XML 32 R19.htm IDEA: XBRL DOCUMENT v3.22.4
Loss And Loss Adjustment Expense Reserves
 12 Months Ended
Dec. 31, 2022
Insurance Loss Reserves [Abstract]  
Loss And Loss Adjustment Expense Reserves Loss and Loss Adjustment Expense Reserves
The following table presents the activity in loss and loss adjustment expense reserves:
 Year Ended December 31,
 202220212020
 (Amounts in thousands)
Gross reserves at January 1$2,226,430 $1,991,304 $1,921,255 
Reinsurance recoverables on unpaid losses(41,379)(54,461)(76,100)
             Cumulative effect of adopting ASU 2016-13 — — 149 
Reinsurance recoverables on unpaid losses, as adjusted(41,379)(54,461)(75,951)
Net reserves at January 1, as adjusted2,185,051 1,936,843 1,845,304 
Incurred losses and loss adjustment expenses related to:
Current year3,314,938 2,786,246 2,372,364 
Prior years47,281 (26,091)22,979 
Total incurred losses and loss adjustment expenses3,362,219 2,760,155 2,395,343 
Loss and loss adjustment expense payments related to:
Current year1,862,006 1,601,998 1,366,661 
Prior years1,125,677 909,949 937,143 
Total payments2,987,683 2,511,947 2,303,804 
Net reserves at December 312,559,587 2,185,051 1,936,843 
Reinsurance recoverables on unpaid losses25,323 41,379 54,461 
Gross reserves at December 31$2,584,910 $2,226,430 $1,991,304 

During 2022, inflationary trends accelerated to their highest level in decades, which had a significant impact on the cost of automobile parts and labor as well as medical expenses for bodily injuries, and supply chain and labor shortage issues lengthened the time to repair vehicles. Bodily injury costs were also under pressure from social inflation. These factors contributed to higher losses and loss adjustment expenses related to the current accident year for 2022 compared to 2021 and 2020. The increase in the provision for insured events of prior years in 2022 of approximately $47.3 million primarily resulted from higher than estimated losses and loss adjustment expenses in the automobile line of insurance business. The inflationary pressures and the supply chain and labor shortage issues discussed above were major contributors to the adverse reserve development in the automobile line of insurance business for 2022.

The decrease in the provision for insured events of prior years in 2021 of approximately $26.1 million primarily resulted from lower than estimated losses and loss adjustment expenses in the homeowners and private passenger automobile lines of
insurance business.

The increase in the provision for insured events of prior years in 2020 of approximately $23.0 million primarily resulted from higher than estimated losses and loss adjustment expenses in the homeowners and commercial automobile lines of insurance business.

The Company recorded catastrophe losses net of reinsurance of approximately $102 million, $104 million, and $64 million in 2022, 2021, and 2020, respectively. Catastrophe losses due to the events that occurred in 2022 totaled approximately $101 million, with no reinsurance benefits used for these losses, resulting primarily from the deep freeze of Winter Storm Elliott and other extreme weather events in Texas, Oklahoma and Georgia, winter storms in California, and the impact of Hurricane Ian in Florida. In addition, the Company experienced unfavorable development of approximately $1 million on prior years' catastrophe losses in 2022. Catastrophe losses due to the events that occurred in 2021 totaled approximately $109 million, with no reinsurance benefits used for these losses, resulting primarily from the deep freeze of Winter Storm Uri and other extreme weather events in Texas and Oklahoma, rainstorms, wildfires and winter storms in California, and the impact of Hurricane Ida in New Jersey and New York. These losses were partially offset by favorable development of approximately $5 million on prior years' catastrophe losses. Catastrophe losses due to the events that occurred in 2020 totaled approximately $69 million, with no reinsurance benefits used for these losses, resulting primarily from wildfires and windstorms in California and extreme weather events outside of California. These losses were partially offset by favorable development of approximately $5 million on prior years' catastrophe losses.

The following is information about incurred and paid claims development as of December 31, 2022, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported liabilities plus expected development on reported claims included within the net incurred claims amounts for our two major product lines: automobile and homeowners lines of business. As the information presented is for these two major product lines only, the total incurred and paid claims development shown below does not correspond to the aggregate development presented in the table above, which is for all product lines and includes unallocated claims adjustment expenses. The cumulative number of reported claims represents open claims, claims closed with payment, and claims closed without payment. It does not include an estimated amount for unreported claims. The number of claims is measured by claim event (such as a car accident or storm damage) and an individual claim event may result in more than one reported claim. The Company considers a claim that does not result in a liability as a claim closed without payment. 

The information about incurred and paid claims development for the years ended December 31, 2013 to 2021 is presented as unaudited supplementary information.

Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Automobile Insurance)As of December 31, 2022
Total of Incurred But Not Reported Liabilities Plus Expected Development on Reported ClaimsCumulative Number of Reported Claims
Accident YearFor the Years Ended December 31,
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020(1)
2021(1)
2022
(Amounts in thousands)(Amounts in thousands)
2013$1,448,567 $1,431,058 $1,447,881 $1,458,421 $1,464,071 $1,468,294 $1,468,237 $1,468,747 $1,468,679 $1,468,976 $805 185
20141,467,175 1,454,366 1,473,545 1,486,322 1,498,504 1,501,075 1,501,713 1,501,850 1,502,161 57 180
20151,551,105 1,588,443 1,610,839 1,634,435 1,645,950 1,649,170 1,653,878 1,654,843 1,078 170
20161,672,853 1,669,642 1,713,696 1,731,997 1,732,410 1,740,807 1,743,417 2,483 155
20171,703,857 1,727,277 1,741,825 1,733,425 1,748,289 1,755,702 11,421 149
20181,781,817 1,773,502 1,785,071 1,806,240 1,807,297 15,370 147
20191,916,269 1,911,268 1,959,262 1,954,151 42,928 148
20201,514,551 1,448,083 1,452,343 76,899 90
20211,811,064 1,879,751 206,875 104
20222,255,032 642,129 109
Total$17,473,673 
__________ 
(1) The information for the years 2013 to 2021 is presented as unaudited supplemental information.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Automobile Insurance)
For the Years Ended December 31,
Accident Year
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020(1)
2021(1)
2022
(Amounts in thousands)
2013$974,445 $1,217,906 $1,340,724 $1,413,999 $1,447,004 $1,460,352 $1,464,277 $1,466,356 $1,467,332 $1,467,838 
2014967,481 1,231,413 1,358,472 1,432,472 1,476,944 1,490,366 1,496,814 1,500,243 1,501,483 
20151,040,253 1,336,223 1,466,368 1,560,480 1,614,188 1,634,780 1,643,443 1,651,465 
20161,094,006 1,395,199 1,554,217 1,656,192 1,699,069 1,722,293 1,736,697 
20171,076,079 1,399,202 1,561,850 1,648,328 1,701,298 1,733,196 
20181,082,127 1,417,637 1,588,049 1,697,228 1,757,923 
20191,134,859 1,494,342 1,698,121 1,828,410 
2020825,398 1,089,096 1,242,000 
2021992,705 1,410,748 
20221,237,725 
Total$15,567,485 
All outstanding liabilities before 2013, net of reinsurance
(1,048)
Loss and allocated loss adjustment expense reserves, net of reinsurance$1,905,140 
__________ 
(1) The information for the years 2013 to 2021 is presented as unaudited supplemental information.


Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Homeowners Insurance)As of December 31, 2022
Total of Incurred But Not Reported Liabilities Plus Expected Development on Reported ClaimsCumulative Number of Reported Claims
Accident YearFor the Years Ended December 31,
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020(1)
2021(1)
2022
(Amounts in thousands)(Amounts in thousands)
2013$191,903 $188,915 $188,026 $186,795 $187,165 $188,014 $187,147 $187,683 $187,627 $187,465 $95 23
2014199,298 202,621 203,218 202,513 204,986 208,003 208,743 209,622 209,071 128 25
2015234,800 234,881 233,501 236,855 238,652 239,941 240,927 237,872 393 24
2016250,691 259,489 259,497 259,708 260,496 259,984 259,722 435 24
2017309,491 295,163 288,322 289,869 289,294 291,360 92 30
2018311,798 308,361 310,695 305,292 306,347 1,192 25
2019359,643 366,139 361,421 360,609 4,888 30
2020420,257 411,404 413,882 7,838 29
2021510,724 511,311 22,449 31
2022578,489 135,547 27
Total$3,356,128 
__________ 
(1) The information for the years 2013 to 2021 is presented as unaudited supplemental information.
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance (Homeowners Insurance)
For the Years Ended December 31,
Accident Year
2013(1)
2014(1)
2015(1)
2016(1)
2017(1)
2018(1)
2019(1)
2020(1)
2021(1)
2022
(Amounts in thousands)
2013$133,528 $174,295 $180,858 $183,860 $185,168 $186,132 $186,494 $186,816 $187,141 $187,222 
2014139,615 186,996 194,605 198,758 202,193 203,333 207,524 207,801 208,737 
2015163,196 213,994 224,178 230,480 234,683 235,971 236,143 236,983 
2016173,537 234,215 245,878 253,919 256,642 258,477 259,045 
2017217,900 269,254 278,341 283,311 286,531 290,291 
2018213,038 271,534 286,658 294,099 300,742 
2019240,240 324,953 340,237 350,288 
2020271,208 365,910 386,297 
2021316,314 458,124 
2022339,242 
Total$3,016,971 
All outstanding liabilities before 2013, net of reinsurance
1,152 
Loss and allocated loss adjustment expense reserves, net of reinsurance$340,309 
__________ 
(1) The information for the years 2013 to 2021 is presented as unaudited supplemental information.


The following is unaudited supplementary information about average historical claims duration as of December 31, 2022.
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years12345678910
Automobile insurance60.0 %18.3 %9.2 %5.6 %2.9 %1.2 %0.5 %0.3 %0.1 %— %
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years12345678910
Homeowners insurance67.0 %22.2 %4.1 %2.3 %1.4 %0.7 %0.6 %0.2 %0.3 %— %
The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated balance sheets is as follows:

Reconciliation of the Disclosure of Incurred and Paid Claims Development
to the Loss and Loss Adjustment Expense Reserves
December 31, 2022
(Amounts in thousands)
Net outstanding liabilities
Automobile insurance$1,905,140 
Homeowners insurance340,309 
Other short-duration insurance lines175,448 
Loss and loss adjustment expense reserves, net of reinsurance recoverables on unpaid losses2,420,897 
Reinsurance recoverables on unpaid losses
Automobile insurance17,341 
Homeowners insurance6,952 
Other short-duration insurance lines1,030 
Total reinsurance recoverables on unpaid losses25,323 
Insurance lines other than short-duration1,077 
Unallocated claims adjustment expenses137,613 
138,690 
Total gross loss and loss adjustment expense reserves$2,584,910