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Property and Casualty Insurance Reserves | 12 Months Ended
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Dec. 31, 2024
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] |
Liability for Future Policyholder Benefits | PROPERTY AND CASUALTY INSURANCE RESERVES The Company’s Property and Casualty Insurance Reserves are reported using the Company’s estimate of its ultimate liability for losses and LAE for claims that occurred prior to the end of any given accounting period but have not yet been paid. Such estimates are based on individual case estimates for reported claims and estimates for IBNR losses, including expected development on reported claims. Property and Casualty Insurance Reserves are recorded net of any expected salvage and subrogation recoveries. The determination of individual case reserves differs by line of business. For personal automobile insurance and commercial automobile insurance, case reserves are set primarily using statistical reserves that are based on studies of historical average paid amounts by state, coverage and product. However, when such reserves exceed certain thresholds they are set manually by adjusters. For preferred homeowners insurance and other personal insurance, case reserves are set by adjusters and are based on the adjusters’ estimates of the amount for which the claims will ultimately be paid. The Company’s actuaries estimate ultimate losses and LAE and, therefore, reserves at least quarterly for most product lines and/or coverage levels using accident quarters or years spanning 10 or more years, depending on the size of the product line and/or coverage level or emerging issues relating to them. The Company’s actuaries use a variety of generally accepted actuarial loss reserving estimation methodologies to estimate the ultimate losses and LAE for the current accident quarter or year and re-estimate the ultimate losses and LAE for previous accident quarters or years to determine if changes in the previous estimates of the ultimate losses and LAE are indicated by the most recent data. The key assumption in these estimation methodologies is that patterns observed in prior periods are indicative of how losses and LAE are expected to develop in the future and that such historical data can be used to predict and estimate ultimate losses and LAE. However, changes in the Company’s business processes, by their very nature, are likely to affect the development patterns, which generally results in the historical development factors becoming less reliable over time in predicting how losses NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) and LAE will ultimately develop. The Company’s actuaries use professional judgment in determining how much weight to place on the development patterns based on the older historical data and how much weight to place on the development patterns based on more recent data. In some cases, the Company’s actuaries make adjustments to the loss reserving estimation methodologies to estimate ultimate losses and LAE. The Company’s actuaries’ quarterly or yearly selections are summed by product and/or coverage levels to create the actuarial indication of the ultimate losses and LAE. Paid amounts are then subtracted from the ultimates to compute the reserves for property and casualty insurance losses and LAE. These results are reviewed by the Company’s actuaries and corporate management who apply their collective judgment and determine the appropriate estimated level of reserves to record. Numerous factors are considered in this determination process, including, but not limited to, the assessed reliability of key loss trends and assumptions that may be significantly influencing the current actuarial indications, changes in claim handling practices or other changes that affect the timing of payment or development patterns, changes in the mix of business, the maturity of the accident year, pertinent trends observed over the recent past, the level of volatility within a particular line of business, the improvement or deterioration of actuarial indications in the current period as compared to prior periods, and the amount of reserves related to third party pools for which the Company has limited access to the underlying data and, accordingly, relies on calculations provided by such pools. The Company’s goal is to ensure that its total reserves for property and casualty insurance losses and LAE are adequate to cover all costs, while sustaining minimal variation from the time reserves for losses and LAE are initially estimated until losses and LAE are fully developed. Changes in the Company’s estimates of these losses and LAE over time, also referred to as “development,” will occur and may be material. The following tables contain information about incurred and paid claims development as of and for the year ended December 31, 2024, net of reinsurance and indemnification, as well as cumulative claim frequency and the total of IBNR liabilities, including expected development on reported claims included within the net incurred losses and allocated LAE amounts. The tables are grouped by major product line and, if relevant, coverage. The information about incurred and paid claims development for the years ended December 31, 2020 through 2023 is presented as supplementary information and is unaudited. NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Specialty Personal Automobile Insurance—Liability 1
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS |  | As of December 31, 2024
|  | Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |
2020 |  | $ | 1,401.2 |  |  | $ | 1,406.4 |  |  | $ | 1,407.8 |  |  | $ | 1,415.9 |  |  | $ | 1,417.8 |  |  | $ | 20.1 |  |  | 476,106 |
2021 |  | 1,856.9 |  |  | 1,824.7 |  |  | 1,844.2 |  |  | 1,861.0 |  |  | 52.8 |  |  | 586,566 |
2022 |  | 1,765.9 |  |  | 1,848.7 |  |  | 1,880.7 |  |  | 98.0 |  |  | 475,177 |
2023 |  | 1,448.7 |  |  | 1,391.7 |  |  | 150.5 |  |  | 304,878 |
2024 |  | 1,224.4 |  |  | 506.0 |  |  | 216,146 |
Total |  | 7,775.6 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |  |  |
2020 |  | $ | 555.2 |  |  | $ | 1,107.6 |  |  | $ | 1,287.8 |  |  | $ | 1,350.0 |  |  | $ | 1,381.3 |  |  |  |  |
2021 |  | 657.1 |  |  | 1,429.4 |  |  | 1,680.8 |  |  | 1,767.5 |  |  |  |  |
2022 |  | 738.2 |  |  | 1,463.3 |  |  | 1,700.4 |  |  |  |  |
2023 |  | 580.4 |  |  | 1,092.8 |  |  |  |  |
2024 |  | 422.6 |  |  |  |  |
Total |  | 6,364.6 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2020, Net of Reinsurance |  | 38.7 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 1,449.7 |  |  |  |  |
1 Tables retrospectively include American Access Casualty Company’s (“AAC”) historical incurred and paid accident year claim information for all periods presented. NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Specialty Personal Automobile Insurance—Physical Damage 1
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS |  | As of December 31, 2024
|  | Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |
2020 |  | $ | 650.5 |  |  | $ | 659.5 |  |  | $ | 659.5 |  |  | $ | 659.0 |  |  | $ | 659.7 |  |  | $ | (0.1) |  |  | 296,478 |
2021 |  | 958.0 |  |  | 967.5 |  |  | 967.2 |  |  | 967.4 |  |  | (0.1) |  |  | 361,993 |
2022 |  | 993.5 |  |  | 989.5 |  |  | 990.0 |  |  | (1.7) |  |  | 309,091 |
2023 |  | 722.6 |  |  | 715.8 |  |  | (5.9) |  |  | 206,366 |
2024 |  | 500.8 |  |  | 7.1 |  |  | 136,921 |
Total |  | 3,833.7 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |  |  |
2020 |  | $ | 585.5 |  |  | $ | 663.8 |  |  | $ | 659.7 |  |  | $ | 658.8 |  |  | $ | 659.4 |  |  |  |  |
2021 |  | 890.1 |  |  | 977.5 |  |  | 968.3 |  |  | 967.2 |  |  |  |  |
2022 |  | 921.9 |  |  | 997.8 |  |  | 990.5 |  |  |  |  |
2023 |  | 699.2 |  |  | 720.7 |  |  |  |  |
2024 |  | 466.7 |  |  |  |  |
Total |  | 3,804.5 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2020, Net of Reinsurance |  | (2.8) |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 26.4 |  |  |  |  |
1 Tables retrospectively include AAC’s historical incurred and paid accident year claim information for all periods presented. NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Commercial Automobile Insurance—Liability
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS |  | As of December 31, 2024
|  | Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |
2020 |  | $ | 140.5 |  |  | $ | 152.0 |  |  | $ | 154.0 |  |  | $ | 155.6 |  |  | $ | 159.7 |  |  | $ | 4.1 |  |  | 19,662 |
2021 |  | 225.6 |  |  | 228.6 |  |  | 240.4 |  |  | 250.4 |  |  | 13.9 |  |  | 27,486 |
2022 |  | 305.1 |  |  | 309.1 |  |  | 317.9 |  |  | 34.8 |  |  | 32,476 |
2023 |  | 379.9 |  |  | 361.7 |  |  | 87.1 |  |  | 35,327 |
2024 |  | 406.6 |  |  | 249.0 |  |  | 29,666 |
Total |  | 1,496.3 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance and Indemnification |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |  |  |
2020 |  | $ | 37.0 |  |  | $ | 87.6 |  |  | $ | 111.7 |  |  | $ | 129.7 |  |  | $ | 144.5 |  |  |  |  |
2021 |  | 50.8 |  |  | 128.0 |  |  | 168.6 |  |  | 208.3 |  |  |  |  |
2022 |  | 72.2 |  |  | 159.0 |  |  | 222.1 |  |  |  |  |
2023 |  | 87.5 |  |  | 189.6 |  |  |  |  |
2024 |  | 69.1 |  |  |  |  |
Total |  | 833.6 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2020, Net of Reinsurance |  | 9.7 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 672.4 |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Commercial Automobile Insurance—Physical Damage
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS |  | As of December 31, 2024
|  | Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |
2020 |  | $ | 31.9 |  |  | $ | 32.2 |  |  | $ | 32.1 |  |  | $ | 32.1 |  |  | $ | 32.3 |  |  | $ | 0.1 |  |  | 11,041 |
2021 |  | 52.4 |  |  | 51.9 |  |  | 51.6 |  |  | 51.8 |  |  | 0.3 |  |  | 17,703 |
2022 |  | 74.5 |  |  | 74.7 |  |  | 74.8 |  |  | 0.5 |  |  | 21,567 |
2023 |  | 90.0 |  |  | 87.5 |  |  | 0.2 |  |  | 20,202 |
2024 |  | 81.6 |  |  | 7.7 |  |  | 16,312 |
Total |  | 328.0 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance and Indemnification |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |  |  |
2020 |  | $ | 26.2 |  |  | $ | 31.9 |  |  | $ | 32.0 |  |  | $ | 32.0 |  |  | $ | 32.1 |  |  |  |  |
2021 |  | 43.3 |  |  | 51.9 |  |  | 51.4 |  |  | 51.5 |  |  |  |  |
2022 |  | 66.8 |  |  | 74.6 |  |  | 74.2 |  |  |  |  |
2023 |  | 80.6 |  |  | 86.9 |  |  |  |  |
2024 |  | 66.1 |  |  |  |  |
Total |  | 310.8 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2020, Net of Reinsurance |  | (0.1) |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 17.1 |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Non-Core Personal Automobile Insurance—Liability
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS |  | As of December 31, 2024
|  | Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |
2020 |  | $ | 148.9 |  |  | $ | 153.6 |  |  | $ | 151.8 |  |  | $ | 158.8 |  |  | $ | 158.4 |  |  | $ | 1.3 |  |  | 24,701 |
2021 |  | 176.9 |  |  | 179.8 |  |  | 180.6 |  |  | 182.0 |  |  | 3.7 |  |  | 27,243 |
2022 |  | 165.0 |  |  | 172.4 |  |  | 173.5 |  |  | 8.6 |  |  | 24,246 |
2023 |  | 135.0 |  |  | 137.5 |  |  | 17.6 |  |  | 16,796 |
2024 |  | 58.7 |  |  | 19.8 |  |  | 6,666 |
Total |  | 710.1 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |  |  |
2020 |  | $ | 44.4 |  |  | $ | 92.8 |  |  | $ | 117.7 |  |  | $ | 141.4 |  |  | $ | 149.8 |  |  |  |  |
2021 |  | 50.3 |  |  | 106.1 |  |  | 144.1 |  |  | 161.9 |  |  |  |  |
2022 |  | 55.0 |  |  | 111.0 |  |  | 139.1 |  |  |  |  |
2023 |  | 43.7 |  |  | 84.6 |  |  |  |  |
2024 |  | 19.6 |  |  |  |  |
Total |  | 555.0 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2020, Net of Reinsurance |  | 4.5 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 159.6 |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Non-Core Personal Automobile Insurance—Physical Damage
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS |  | As of December 31, 2024
|  | Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |
2020 |  | $ | 96.1 |  |  | $ | 98.0 |  |  | $ | 97.9 |  |  | $ | 97.5 |  |  | $ | 97.5 |  |  | $ | — |  |  | 47,591 |
2021 |  | 118.5 |  |  | 117.9 |  |  | 117.1 |  |  | 117.1 |  |  | — |  |  | 53,490 |
2022 |  | 110.9 |  |  | 113.5 |  |  | 113.6 |  |  | (0.2) |  |  | 48,160 |
2023 |  | 86.6 |  |  | 84.7 |  |  | (0.7) |  |  | 33,951 |
2024 |  | 31.7 |  |  | (1.2) |  |  | 12,556 |
Total |  | 444.6 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |  |  |
2020 |  | $ | 90.9 |  |  | $ | 98.4 |  |  | $ | 97.6 |  |  | $ | 97.5 |  |  | $ | 97.5 |  |  |  |  |
2021 |  | 113.1 |  |  | 118.1 |  |  | 117.2 |  |  | 117.1 |  |  |  |  |
2022 |  | 108.7 |  |  | 114.6 |  |  | 113.7 |  |  |  |  |
2023 |  | 84.8 |  |  | 85.4 |  |  |  |  |
2024 |  | 32.1 |  |  |  |  |
Total |  | 445.8 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2020, Net of Reinsurance |  | — |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | (1.2) |  |  |  |  |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Non-Core Homeowners Insurance
DOLLARS IN MILLIONS, EXCEPT CUMULATIVE INCURRED CLAIMS |  | As of December 31, 2024
|  | Incurred Losses and Allocated LAE, Net of Reinsurance For the Years Ended December 31, |  | Total of IBNR Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |
2020 |  | $ | 157.0 |  |  | $ | 149.8 |  |  | $ | 144.6 |  |  | $ | 141.2 |  |  | $ | 141.8 |  |  | $ | 0.2 |  |  | 14,102 |
2021 |  | 149.9 |  |  | 149.8 |  |  | 143.9 |  |  | 144.3 |  |  | 0.5 |  |  | 13,555 |
2022 |  | 142.7 |  |  | 152.7 |  |  | 155.2 |  |  | 1.1 |  |  | 11,526 |
2023 |  | 126.6 |  |  | 135.3 |  |  | 1.6 |  |  | 9,919 |
2024 |  | 80.6 |  |  | 7.2 |  |  | 4,153 |
Total |  | 657.2 |  |  |  |  |
|  | Cumulative Paid Losses and Allocated LAE, Net of Reinsurance |  |  |  |
|  | For the Years Ended December 31, |  |  |  |
Accident Year |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |  |  |
2020 |  | $ | 94.6 |  |  | $ | 130.8 |  |  | $ | 137.4 |  |  | $ | 139.8 |  |  | $ | 140.8 |  |  |  |  |
2021 |  | 100.6 |  |  | 132.6 |  |  | 139.7 |  |  | 141.3 |  |  |  |  |
2022 |  | 97.0 |  |  | 141.2 |  |  | 149.3 |  |  |  |  |
2023 |  | 84.7 |  |  | 127.8 |  |  |  |  |
2024 |  | 59.2 |  |  |  |  |
Total |  | 618.4 |  |  |  |  |
Outstanding Loss and Allocated LAE Reserves on Accident Years before 2020, Net of Reinsurance |  | 0.8 |  |  |  |  |
Loss and Allocated LAE Reserves, Net of Reinsurance |  | $ | 39.6 |  |  |  |  |
The claim counts in the preceding tables are cumulative reported claim counts as of December 31, 2024 and are equal to the sum of cumulative open and cumulative closed claims, including claims closed without payment. Certain product lines, particularly the Company’s specialty personal automobile insurance, tend to have a higher percentage of claims closed without payment. The Company's claims associated with automobile insurance are counted at the feature level. As such, each claimant and each coverage is counted separately. For example, if for one occurrence, the Company's policyholder is at fault for damage to his/her own vehicle, another party's vehicle and three injured parties, there may be five features—three for bodily injury liability, one for property damage liability and one for first-party collision coverage. There may also be another feature for first-party medical payments. NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) The following table reconciles the net incurred and paid claims development tables presented above to the Company's liability for Property and Casualty Insurance Reserves included in the Consolidated Balance Sheets at December 31, 2024.
DOLLARS IN MILLIONS |  | 2024
Property and Casualty Insurance Reserves, Net of Reinsurance: |  |
Specialty Personal Automobile Insurance—Liability 1 |  | $ | 1,449.7 |
Specialty Personal Automobile Insurance—Physical Damage 1 |  | 26.4 |
Commercial Automobile Insurance—Liability |  | 672.4 |
Commercial Automobile Insurance—Physical Damage |  | 17.1 |
Non-Core Personal Automobile Insurance—Liability |  | 159.6 |
Non-Core Personal Automobile Insurance—Physical Damage |  | (1.2) |
Non-Core Homeowners Insurance |  | 39.6 |
Other |  | 35.8 |
Total |  | $ | 2,399.4 |
Reinsurance Recoverables on Unpaid Losses and Allocated LAE: |  |
Specialty Personal Automobile Insurance—Liability |  | $ | 5.7 |
Non-Core Preferred Personal Automobile Insurance—Liability |  | 16.9 |
Non-Core Homeowners Insurance |  | — |
Other |  | 1.7 |
Total |  | 24.3 |
Unallocated LAE |  | 197.6 |
Property and Casualty Insurance Reserves, Gross of Reinsurance 1 |  | $ | 2,621.3 |
1 Includes $8.8 million and $0.6 million of Specialty Personal Automobile Liability and Physical Damage Insurance Reserves, respectively, related to Kemper Reciprocal, which is reported as a consolidated variable interest entity.
The following is supplementary information about average historical claims duration as of December 31, 2024.
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Years |  | 1 |  | 2 |  | 3 |  | 4 |  | 5
Specialty Personal Automobile Insurance—Liability |  | 38.0 | % |  | 77.8 | % |  | 90.5 | % |  | 95.1 | % |  | 97.4 | %
Specialty Personal Automobile Insurance—Physical Damage |  | 93.0 |  |  | 100.0 |  |  | 100.0 |  |  | 100.0 |  |  | 100.0 |
Commercial Automobile Insurance—Liability |  | 21.5 |  |  | 52.1 |  |  | 69.1 |  |  | 82.2 |  |  | 90.5 |
Commercial Automobile Insurance—Physical Damage |  | 85.4 |  |  | 100.0 |  |  | 100.0 |  |  | 100.0 |  |  | 100.0 |
Non-Core Preferred Personal Automobile Insurance—Liability |  | 30.5 |  |  | 60.6 |  |  | 77.9 |  |  | 89.1 |  |  | 94.6 |
Non-Core Preferred Personal Automobile Insurance—Physical Damage |  | 97.4 |  |  | 100.0 |  |  | 100.0 |  |  | 100.0 |  |  | 100.0 |
Non-Core Homeowners Insurance |  | 67.0 |  |  | 92.4 |  |  | 96.6 |  |  | 98.3 |  |  | 99.3 |
NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) Property and Casualty Insurance Reserve activity for the years ended December 31, 2024, 2023 and 2022 was:
DOLLARS IN MILLIONS |  | 2024 |  | 2023 |  | 2022
Property and Casualty Insurance Reserves: |  |  |  |  |  |
Gross of Reinsurance at Beginning of Year |  | $ | 2,680.5 |  |  | $ | 2,756.9 |  |  | $ | 2,772.7 |
Less: Reinsurance Recoverables at Beginning of Year |  | 27.8 |  |  | 39.6 |  |  | 41.9 |
Property and Casualty Insurance Reserves, Net of Reinsurance at Beginning of Year |  | 2,652.7 |  |  | 2,717.3 |  |  | 2,730.8 |
Incurred Losses and LAE related to: |  |  |  |  |  |
Current Year |  | 2,745.9 |  |  | 3,429.9 |  |  | 4,103.3 |
Prior Years |  | 29.8 |  |  | 159.8 |  |  | (14.6) |
Total Incurred Losses and LAE |  | 2,775.7 |  |  | 3,589.7 |  |  | 4,088.7 |
Paid Losses and LAE related to: |  |  |  |  |  |
Current Year: |  | 1,383.0 |  |  | 1,965.3 |  |  | 2,460.5 |
Prior Years |  | 1,457.8 |  |  | 1,689.0 |  |  | 1,641.7 |
Total Paid Losses and LAE |  | 2,840.8 |  |  | 3,654.3 |  |  | 4,102.2 |
Property and Casualty Insurance Reserves, Net of Reinsurance at End of Year |  | 2,587.6 |  |  | 2,652.7 |  |  | 2,717.3 |
Plus: Reinsurance Recoverables at End of Year |  | 24.3 |  |  | 27.8 |  |  | 39.6 |
Property and Casualty Insurance Reserves, Gross of Reinsurance at End of Year |  | $ | 2,611.9 |  |  | $ | 2,680.5 |  |  | $ | 2,756.9 |
Property and Casualty Insurance Reserves are estimated based on historical experience patterns and current economic trends. Actual loss experience and loss trends may differ from these historical experience patterns and economic conditions. Loss experience and loss trends emerge over several years from the dates of loss inception. The Company monitors such emerging loss trends on a quarterly basis. Changes in such estimates are included in the Consolidated Statements of Income (Loss) in the period of change. Additionally, the Company reviews if any premium revisions are appropriate as a result of any incurred losses and LAE related to prior years recorded in the current period. For the year ended December 31, 2024, 2023 and 2022, no additional premiums or return premiums were recorded. In 2024, the Company incurred $22.6 million of adverse reserve development on prior accident years which was primarily attributable to increased claim severity on homeowners, umbrella, and bodily injury coverages within Non-Core Operations. Additionally, the Company experienced adverse development of $7.2 million on its Commercial Automobile business within the Specialty Property and Casualty Insurance segment, driven by higher than expected loss emergence on bodily injury coverages. In 2023, the Company recognized $108.7 million of unfavorable development within the Specialty Personal Automobile product line, primarily driven by Florida personal injury protection experiencing increased frequency and severity resulting from more litigated claim activity, as well as adverse development from bodily injury and property damage coverages. In addition, the Company experienced $24.2 million and $24.8 million of adverse development on the Commercial Automobile product and Non-Core Operations business, respectively, which was primarily attributable to higher than expected emergence on prior accident years within the bodily injury and physical damage coverages. In 2022, the Company experienced $14.6 million of favorable prior year development primarily from the Specialty Personal Automobile product line, which developed favorably by $17.6 million due primarily to more favorable loss patterns for liability and physical damage coverages. This development was partially offset by adverse development on the Commercial Automobile product of $3.6 million as a result of less favorable emergence on liability coverages. The Company cannot predict whether loss and LAE reserves will develop favorably or unfavorably from the amounts reported in the Consolidated Financial Statements. The Company believes that any such development will not have a material effect on the Company’s consolidated financial position, but could have a material effect on the Company’s consolidated financial results for a given period. Reinsurance recoverables on property and casualty insurance reserves were $24.3 million and $27.8 million at December 31, 2024 and 2023, respectively. These recoverables are concentrated with several reinsurers, the majority of which are highly rated by one or more of the principal investor and/or insurance company rating agencies. While most of these recoverables were NOTE 6. PROPERTY AND CASUALTY INSURANCE RESERVES (Continued) unsecured at December 31, 2024 and 2023, the agreements with the reinsurers generally provide for some form of collateralization upon the occurrence of certain events. LIABILITY FOR FUTURE POLICYHOLDER BENEFITS The Company’s Life Insurance Reserves are reported using the Company’s estimate of its liability for future policyholder benefits. The liability for future policyholder benefits is grouped by contract type and issue year into cohorts consistent with the grouping used in estimating the associated liability. Significant assumption inputs to the calculation of the liability for future policyholder benefits include mortality, lapses, and discount rates (both accretion and current). The Company’s actuaries review assumptions used to measure the liability for future policyholder benefits for nonparticipating traditional and limited pay long-duration contracts at least annually. If there is a change, assumptions are updated with the recognition and remeasurement recorded in the Company’s Consolidated Statements of Income (Loss). The Company’s actuaries use a variety of generally accepted actuarial methodologies, in accordance with Actuarial Standards of Practice, in determining the assumptions. A key assumption in these estimation methodologies is that patterns observed in prior periods are indicative of how policyholder benefits are expected to develop in the future and that such historical data can be used to predict and estimate future losses. However, changes in the Company’s business processes and the macroeconomic environment, by their very nature, are likely to affect the actual to expected experience which generally results in the historical experience factors becoming less reliable over time in predicting how cash flows will ultimately develop. The Company’s actuaries use professional judgment in determining how much weight to place on the actual to expected experience based on the older historical data and how much weight to place on more recent experience data. In some cases, the Company’s actuaries make adjustments to the assumptions to estimate losses. These assumptions are reviewed by the Company’s actuaries and corporate management who apply their collective judgment and determine the appropriate assumptions to adopt for the underlying business. Numerous factors are considered in this determination process, including, but not limited to, the assessed reliability of key assumptions that may be significantly influencing the current actuarial indications, changes in pricing and product offerings, changes in customer base, changes in agency operations or other changes that affect the timing of payments, the policyholder behaviors observed over the recent past, the level of volatility within a particular line of business, and the improvement or deterioration of actuarial indications in the current period as compared to prior periods. Changes in the Company’s assumptions underlying these liabilities over time will occur and may be material. NOTE 7. LIABILITY FOR FUTURE POLICYHOLDER BENEFITS (Continued) The following tables summarize balances and changes in the present value of expected net premiums, present value of expected future policyholder benefits and net liability for future policyholder benefits as of and for the years ended December 31, 2024, 2023 and 2022:
DOLLARS IN MILLIONS | Year Ended
|  | Dec 31, 2024 |  | Dec 31, 2023 |  | Dec 31, 2022
Present Value of Expected Net Premiums | Balance, Beginning of Year | $ | 675.4 |  |  | $ | 688.6 |  |  | $ | 669.0 |
Beginning Balance at Original Discount Rate | $ | 694.7 |  |  | $ | 728.9 |  |  | $ | 599.8 |
Effect of Changes in Cash Flow Assumptions | (56.6) |  |  | (35.7) |  |  | 68.5 |
Effect of Actual Variances from Expected Experience | 0.3 |  |  | (38.5) |  |  | (6.4) |
Adjusted Beginning of Period Balance | 638.4 |  |  | 654.7 |  |  | 661.9 |
Issuances | 105.4 |  |  | 105.2 |  |  | 133.2 |
Interest Accrual | 31.0 |  |  | 29.7 |  |  | 21.9 |
Net Premiums Collected | (93.8) |  |  | (94.9) |  |  | (88.1) |
Ending Balance at Original Discount Rate | 681.0 |  |  | 694.7 |  |  | 728.9 |
Effect of Changes in Discount Rate Assumptions | (34.9) |  |  | (19.3) |  |  | (40.3) |
Balance, End of Year | $ | 646.1 |  |  | $ | 675.4 |  |  | $ | 688.6 |
Present Value of Expected Future Policyholder Benefits | Balance, Beginning of Year | $ | 3,613.2 |  |  | $ | 3,561.0 |  |  | $ | 4,933.1 |
Beginning Balance at Original Discount Rate | $ | 3,835.9 |  |  | $ | 3,906.2 |  |  | $ | 3,788.1 |
Effect of Changes in Cash Flow Assumptions | (68.5) |  |  | (59.0) |  |  | 77.2 |
Effect of Actual Variances From Expected Experience | (7.0) |  |  | (45.5) |  |  | (7.0) |
Adjusted Beginning of Period Balance | 3,760.4 |  |  | 3,801.7 |  |  | 3,858.3 |
Issuances | 105.5 |  |  | 104.6 |  |  | 133.2 |
Interest Accrual | 170.5 |  |  | 171.0 |  |  | 164.0 |
Benefit Payments | (224.3) |  |  | (241.4) |  |  | (249.3) |
Ending Balance at Original Discount Rate | 3,812.1 |  |  | 3,835.9 |  |  | 3,906.2 |
Effect of Changes in Discount Rate Assumptions | (516.2) |  |  | (222.7) |  |  | (345.2) |
Balance, End of Year | $ | 3,295.9 |  |  | $ | 3,613.2 |  |  | $ | 3,561.0 |
| Net Liability for Future Policyholder Benefits, pre-flooring | $ | 2,649.8 |  |  | $ | 2,937.8 |  |  | $ | 2,872.4 |
| Cumulative impact of flooring the future Policyholder Benefits Reserve | — |  |  | — |  |  | — |
| Net Liability for Future Policyholder Benefits, post-flooring | 2,649.8 |  |  | 2,937.8 |  |  | 2,872.4 |
| Less: Reinsurance Recoverable | — |  |  | — |  |  | — |
| Net Liability for Future Policyholder Benefits, After Reinsurance Recoverable | $ | 2,649.8 |  |  | $ | 2,937.8 |  |  | $ | 2,872.4 |
The weighted-average liability duration of the liability for future policyholder benefits as calculated under current rates is as follows:
| Dec 31, 2024 |  | Dec 31, 2023 |  | Dec 31, 2022
Weighted-Average Liability Duration of the Liability for Future Policyholder Benefits (Years) | 13.9 |  | 15.3 |  | 14.6
NOTE 7. LIABILITY FOR FUTURE POLICYHOLDER BENEFITS (Continued) The reconciliation of the net liability for future policyholder benefits to Life and Health Insurance Reserves in the Consolidated Balance Sheets is as follows:
DOLLARS IN MILLIONS | Dec 31, 2024 |  | Dec 31, 2023
Net Liability for Future Policyholder Benefits, post-flooring | $ | 2,649.8 |  |  | $ | 2,937.8 |
Deferred Profit Liability | 412.1 |  |  | 337.8 |
Other 1 | 137.8 |  |  | 146.8 |
Total Life and Health Insurance Reserves | $ | 3,199.7 |  |  | $ | 3,422.4 |
1 Other primarily consists of Accident and Health and Universal Life reserves The amounts of expected undiscounted future benefit payments, expected undiscounted future gross premiums and expected discounted future gross premiums, is as follows:
DOLLARS IN MILLIONS | Dec 31, 2024 |  | Dec 31, 2023
Expected Future Benefit Payments, undiscounted | $ | 10,100.0 |  |  | $ | 10,185.2 |
Expected Future Gross Premiums, undiscounted | $ | 3,976.4 |  |  | $ | 4,107.9 |
Expected Future Gross Premiums, discounted | $ | 2,628.1 |  |  | $ | 2,800.6 |
The amount of revenue and interest recognized in the Consolidated Statements of Income (Loss) is as follows:
|  | Year Ended
DOLLARS IN MILLIONS |  | Dec 31, 2024 |  | Dec 31, 2023 |  | Dec 31, 2022
Gross Premiums or Assessments |  | $ | 399.6 |  |  | $ | 399.0 |  |  | $ | 392.1 |
Interest Expense |  | $ | 139.5 |  |  | $ | 141.3 |  |  | $ | 142.1 |
The weighted-average interest rate is as follows:
| Dec 31, 2024 |  | Dec 31, 2023
Interest Accretion Rate | 4.55 | % |  | 4.57 | %
Current Discount Rate | 5.77 | % |  | 5.08 | %
Significant assumption inputs to the calculation of the liability for future policyholder benefits include mortality, lapses, and discount rates (both accretion and current). The Company reviewed and updated mortality and lapse assumptions during the fourth quarter of 2024. Market data that underlies current discount rates was updated as of December 31, 2024. The balances of and changes in Deferred Profit Liability as of and for the years indicated below are as follows:
DOLLARS IN MILLIONS | Dec 31, 2024 |  | Dec 31, 2023 |  | Dec 31, 2022
Balance, beginning of period | $ | 337.8 |  |  | $ | 253.6 |  |  | $ | 193.4 |
Annual assumption changes | 4.8 |  |  | 15.0 |  |  | (12.7) |
Profits deferred | 160.7 |  |  | 163.1 |  |  | 164.7 |
Interest accrual | 17.1 |  |  | 13.2 |  |  | 10.4 |
Amortization | (110.7) |  |  | (111.2) |  |  | (101.6) |
Effect of actual variances from expected experience and other changes | 2.4 |  |  | 4.1 |  |  | (0.6) |
Balance, end of period | $ | 412.1 |  |  | $ | 337.8 |  |  | $ | 253.6 |

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- Definition The entire disclosure for liabilities related to future policy benefits and unpaid claims and claim adjustments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480081/944-40-50-3 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 40 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/944-40/tableOfContent + Details
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