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Note 10 - Reserve for Losses and Loss Adjustment Expenses | 12 Months Ended
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Dec. 31, 2025
Insurance [Abstract] |
Reserve for Losses and Loss Adjustment Expenses [Text Block] | 10. Reserve for Losses and Loss Adjustment Expenses Loss and loss adjustment expenses reserves represent management’s best estimate of the ultimate cost of all reported and unreported losses incurred for the years ended December 31, 2025, 2024 and 2023. The Company does not discount loss and loss adjustment expense reserves. The reserves for unpaid losses and loss adjustment expenses are estimated using individual case-basis valuations and statistical analyses. Those estimates are subject to the effects of trends in loss severity and frequency. In addition to case reserves, which are generally based on reported claims, the Company establishes reserves for incurred but not reported claims (“IBNR”). IBNR reserves are developed to provide for (i) the estimated amount of future loss payments on incurred claims not yet reported, and (ii) potential development on reported claims. IBNR reserves are estimated based on generally accepted actuarial reserving techniques that consider quantitative loss experience data and, where appropriate, qualitative factors. The Company uses statistical analysis to estimate the cost of losses and loss adjustment expenses related to IBNR. Those estimates are based on historical information, industry information and practices, and estimates of trends that may affect the ultimate frequency of incurred but not reported claims and changes in ultimate claims severity. The Company regularly reviews its reserve estimates and adjusts them as necessary as experience develops or as new information becomes known. Such adjustments are included in current operations. During the loss settlement period, if there are indications that claims frequency or severity exceeds initial expectations, the Company generally increases its reserves for losses and loss adjustment expenses. Conversely, when claims frequency and severity trends are more favorable than initially anticipated, the Company generally reduces its reserves for losses and loss adjustment expenses once it has sufficient data to confirm the validity of the favorable trends. Even after such adjustments, the ultimate liability may exceed or be less than the revised estimates. Accordingly, the ultimate settlement of losses and the related loss adjustment expenses may vary significantly from the estimate included in the Company’s consolidated financial statements. Although considerable variability is inherent in such estimates, management believes the reserves for losses and loss adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. Any adjustments to estimates are recorded in the current period. The following table provides a reconciliation of the beginning and ending reserve balances for losses and LAE on a net of reinsurance basis to the gross amounts reported in the accompanying consolidated balance sheets:
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
|  | ($ in thousands) |
Reserve for losses and loss adjustment expense, net of reinsurance recoverables at beginning of period |  | $ | 155,299 |  |  | $ | 97,653 |  |  | $ | 77,520 |
Add: Balance acquired from FIA |  |  | 6,788 |  |  |  | — |  |  |  | — |
Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to: |  |  |  |  |  |  |  |  |
Current year |  |  | 248,365 |  |  |  | 137,797 |  |  |  | 70,363 |
Prior years |  |  | (19,771 | ) |  |  | (3,038 | ) |  |  | 2,229 |
Total incurred |  |  | 228,594 |  |  |  | 134,759 |  |  |  | 72,592 |
Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to: |  |  |  |  |  |  |  |  |
Current year |  |  | 75,913 |  |  |  | 43,582 |  |  |  | 19,631 |
Prior years |  |  | 38,810 |  |  |  | 33,531 |  |  |  | 32,828 |
Total payments |  |  | 114,723 |  |  |  | 77,113 |  |  |  | 52,459 |
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period |  |  | 275,958 |  |  |  | 155,299 |  |  |  | 97,653 |
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period |  |  | 412,273 |  |  |  | 348,083 |  |  |  | 244,622 |
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period |  | $ | 688,231 |  |  | $ | 503,382 |  |  | $ | 342,275 |
The foregoing reconciliation shows favorable net development of $19.8 million and $3.0 million in 2025 and 2024, respectively, and unfavorable net development of $2.2 million in 2023. During 2025 and 2024, the net favorable reserve development was primarily due to lower than anticipated severity of attritional losses in our Inland Marine and Other Property line of business. During 2023, the net unfavorable reserve development was primarily due to the effect of ceding gross favorable development under our catastrophe XOL reinsurance program and due to unfavorable development on lines of business subject to lower amounts of ceding. The Company compiles and aggregates its claims data by grouping the claims according to the year in which the claim occurred (“Accident Year”) when analyzing claim payment and emergence patterns and trends over time. For the purpose of defining claims frequency, the number of reported claims is by loss occurrence and includes claims that do not result in a liability or payment associated with them. The following tables show information about the Company’s incurred and paid loss development as of December 31, 2025, net of reinsurance, as well as cumulative claim frequency, the total of IBNR liabilities included within the net incurred loss amounts and the average historical claims duration as of December 31, 2025. The loss information has been disaggregated so that losses that are expected to develop in a similar manner are grouped together. The information provided herein about incurred and paid accident year claims development for the years ended December 31, 2025 and prior is presented as unaudited supplementary information. Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance Property Insurance (in thousands) (1)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | As of December 31, 2025 |
|  | Year Ended December 31, |  |  | Incurred but Not Reported |  |  | Cumulative Number of |
Accident Year |  | 2016 |  |  | 2017 |  |  | 2018 |  |  | 2019 |  |  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |  |  | Liabilities |  |  | Claims |
2016 |  | $ | 7,450 |  |  | $ | 7,127 |  |  | $ | 6,972 |  |  | $ | 7,090 |  |  | $ | 7,075 |  |  | $ | 7,062 |  |  | $ | 7,125 |  |  | $ | 5,730 |  |  | $ | 5,730 |  |  | $ | 5,737 |  |  | $ | — |  |  | $ | 1,384 |
2017 |  |  |  |  |  | 12,425 |  |  |  | 10,893 |  |  |  | 10,644 |  |  |  | 10,652 |  |  |  | 10,561 |  |  |  | 10,668 |  |  |  | 12,339 |  |  |  | 11,978 |  |  |  | 11,980 |  |  |  | — |  |  |  | 3,624 |
2018 |  |  |  |  |  |  |  |  | 8,163 |  |  |  | 8,103 |  |  |  | 7,939 |  |  |  | 7,950 |  |  |  | 7,941 |  |  |  | 8,010 |  |  |  | 7,978 |  |  |  | 7,978 |  |  |  | — |  |  |  | 1,198 |
2019 |  |  |  |  |  |  |  |  |  |  |  | 4,575 |  |  |  | 4,223 |  |  |  | 3,947 |  |  |  | 4,293 |  |  |  | 4,350 |  |  |  | 4,365 |  |  |  | 4,372 |  |  |  | — |  |  |  | 1,690 |
2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 61,434 |  |  |  | 57,248 |  |  |  | 59,565 |  |  |  | 56,008 |  |  |  | 56,859 |  |  |  | 57,114 |  |  |  | 5 |  |  |  | 5,161 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 29,836 |  |  |  | 25,158 |  |  |  | 25,733 |  |  |  | 27,902 |  |  |  | 26,798 |  |  |  | 212 |  |  |  | 5,124 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 42,887 |  |  |  | 44,943 |  |  |  | 42,358 |  |  |  | 39,443 |  |  |  | 2,458 |  |  |  | 4,151 |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 40,921 |  |  |  | 36,587 |  |  |  | 32,442 |  |  |  | 1,533 |  |  |  | 4,789 |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 77,421 |  |  |  | 62,179 |  |  |  | 13,324 |  |  |  | 8,636 |
2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 113,528 |  |  |  | 42,868 |  |  |  | 10,831 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 361,571 |  |  | $ | 60,400 |  |  | $ | 46,588 |
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance Property Insurance (in thousands) (1)
|  | Year Ended December 31, |
Accident Year |  | 2016 |  |  | 2017 |  |  | 2018 |  |  | 2019 |  |  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |
2016 |  | $ | 4,823 |  |  | $ | 6,420 |  |  | $ | 6,801 |  |  | $ | 7,051 |  |  | $ | 7,072 |  |  | $ | 7,062 |  |  | $ | 7,125 |  |  | $ | 5,729 |  |  | $ | 5,729 |  |  | $ | 5,737 |
2017 |  |  |  |  |  | 9,102 |  |  |  | 10,719 |  |  |  | 10,639 |  |  |  | 10,640 |  |  |  | 10,560 |  |  |  | 10,636 |  |  |  | 12,339 |  |  |  | 11,978 |  |  |  | 11,980 |
2018 |  |  |  |  |  |  |  |  | 4,409 |  |  |  | 7,889 |  |  |  | 7,931 |  |  |  | 7,943 |  |  |  | 7,943 |  |  |  | 7,999 |  |  |  | 7,978 |  |  |  | 7,979 |
2019 |  |  |  |  |  |  |  |  |  |  |  | 2,179 |  |  |  | 3,510 |  |  |  | 3,757 |  |  |  | 4,170 |  |  |  | 4,345 |  |  |  | 4,365 |  |  |  | 4,372 |
2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 31,862 |  |  |  | 49,222 |  |  |  | 55,504 |  |  |  | 55,619 |  |  |  | 56,712 |  |  |  | 57,086 |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 11,355 |  |  |  | 22,500 |  |  |  | 24,408 |  |  |  | 26,466 |  |  |  | 26,358 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 12,647 |  |  |  | 30,042 |  |  |  | 35,271 |  |  |  | 35,914 |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 14,226 |  |  |  | 26,378 |  |  |  | 28,855 |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 32,850 |  |  |  | 45,154 |
2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 58,801 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 282,236 |
Reserve for losses and loss adjustment expense, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 79,335 |
(1) Data presented for these calendar years is required supplementary information, which is unaudited. Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Property Insurance (unaudited)
|  | Year 1 |  |  | Year 2 |  |  | Year 3 |  |  | Year 4 |  |  | Year 5 |  |  | Year 6 |  |  | Year 7 (2) |  |  | Year 8 |  |  | Year 9 (2) |  |  | Year 10 (2) |
Payout percentage |  |  | 31.90 | % |  |  | 7.10 | % |  |  | 3.66 | % |  |  | 1.11 | % |  |  | 0.44 | % |  |  | 3.10 | % |  |  | (6.96 | )% |  |  | 0.30 | % |  |  | (0.46 | )% |  |  | (0.66 | )%
(2) Negative payout percentages are due to timing of reinsurance payments, allocations of reinsurance between different lines of business based on actual results, and allocation of reinsurance to different periods for reinsurance treaties in effect for multiple periods. These are primarily associated with larger recoveries from catastrophe events in earlier years of operation. Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance Other Liability Occurrence (in thousands) (1)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | As of December 31, 2025 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Incurred but Not Reported |  |  | Cumulative Number of |
Accident Year |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |  |  | Liabilities |  |  | Claims |
Prior |  | $ | 109 |  |  | $ | 35 |  |  | $ | 46 |  |  | $ | 47 |  |  | $ | 216 |  |  | $ | 150 |  |  |  | 13 |
2021 |  |  | 2,138 |  |  |  | 1,641 |  |  |  | 2,172 |  |  |  | 2,428 |  |  |  | 2,230 |  |  |  | 695 |  |  |  | 34 |
2022 |  |  |  |  |  | 7,160 |  |  |  | 8,755 |  |  |  | 9,425 |  |  |  | 8,789 |  |  |  | 1,854 |  |  |  | 98 |
2023 |  |  |  |  |  |  |  |  | 5,005 |  |  |  | 8,335 |  |  |  | 10,278 |  |  |  | 2,308 |  |  |  | 147 |
2024 |  |  |  |  |  |  |  |  |  |  |  | 21,811 |  |  |  | 24,428 |  |  |  | 17,521 |  |  |  | 440 |
2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 62,826 |  |  |  | 57,870 |  |  |  | 530 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 108,767 |  |  | $ | 80,398 |  |  |  | 1,262 |
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance Other Liability Occurrence (in thousands) (1)
Accident Year |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |
Prior |  | $ | 109 |  |  | $ | 35 |  |  | $ | 46 |  |  | $ | 47 |  |  | $ | 54 |
2021 |  |  | 141 |  |  |  | 347 |  |  |  | 653 |  |  |  | 906 |  |  |  | 1,338 |
2022 |  |  |  |  |  | 746 |  |  |  | 1,603 |  |  |  | 3,445 |  |  |  | 5,355 |
2023 |  |  |  |  |  |  |  |  | 372 |  |  |  | 1,146 |  |  |  | 5,552 |
2024 |  |  |  |  |  |  |  |  |  |  |  | 869 |  |  |  | 4,024 |
2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,344 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 18,667 |
Reserve for losses and loss adjustment expense, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 90,100 |
(1) Data presented for these calendar years is required supplementary information, which is unaudited. Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Other Liability Occurrence (unaudited)
|  | Year 1 |  |  | Year 2 |  |  | Year 3 |  |  | Year 4 |  |  | Year 5 |
Payout percentage |  |  | 5.14 | % |  |  | 9.86 | % |  |  | 25.85 | % |  |  | 16.54 | % |  |  | 19.37 | %
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance Other Liability Claims Made (in thousands) (1)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | As of December 31, 2025 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Incurred but Not Reported |  |  | Cumulative Number of |
Accident Year |  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |  |  | Liabilities |  |  | Claims |
Prior |  | $ | 48 |  |  | $ | 26 |  |  | $ | 7 |  |  | $ | — |  |  | $ | 286 |  |  | $ | 2,266 |  |  | $ | 2,264 |  |  |  | 7 |
2021 |  |  |  |  |  | 3,429 |  |  |  | 3,299 |  |  |  | 2,928 |  |  |  | 2,252 |  |  |  | 1,516 |  |  |  | 313 |  |  |  | 109 |
2022 |  |  |  |  |  |  |  |  | 8,871 |  |  |  | 8,873 |  |  |  | 7,674 |  |  |  | 6,762 |  |  |  | 1,834 |  |  |  | 430 |
2023 |  |  |  |  |  |  |  |  |  |  |  | 12,580 |  |  |  | 12,110 |  |  |  | 11,511 |  |  |  | 4,166 |  |  |  | 958 |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 18,503 |  |  |  | 21,021 |  |  |  | 8,531 |  |  |  | 1,355 |
2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 29,299 |  |  |  | 17,409 |  |  |  | 1,977 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 72,375 |  |  | $ | 34,517 |  |  |  | 4,836 |
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance Other Liability Claims Made (in thousands) (1)
Accident Year |  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |
Prior |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  | $ | 1 |
2021 |  |  |  |  |  | 62 |  |  |  | 221 |  |  |  | 449 |  |  |  | 1,009 |  |  |  | 1,040 |
2022 |  |  |  |  |  |  |  |  | 481 |  |  |  | 1,584 |  |  |  | 2,776 |  |  |  | 3,841 |
2023 |  |  |  |  |  |  |  |  |  |  |  | 1,382 |  |  |  | 3,310 |  |  |  | 5,118 |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,168 |  |  |  | 8,461 |
2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,392 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 24,853 |
Reserve for losses and loss adjustment expense, net of reinsurance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 47,522 |
(1) Data presented for these calendar years is required supplementary information, which is unaudited. Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Other Liability Claims Made (unaudited)
|  | Year 1 |  |  | Year 2 |  |  | Year 3 |  |  | Year 4 |  |  | Year 5 |
Payout percentage |  |  | 12.97 | % |  |  | 15.99 | % |  |  | 16.12 | % |  |  | 26.34 | % |  |  | 2.03 | %
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:
|  | 2025 |
|  | ($ in thousands) |
Reserve for losses and loss adjustment expense, net of reinsurance recoverables: |  |  |
Property |  | $ | 79,337 |
Other liability occurrence |  |  | 90,099 |
Other liability claims made |  |  | 47,522 |
Reinsurance - Nonproportional assumed property (1) |  |  | 25,627 |
Other |  |  | 33,373 |
Total reserve for losses and loss adjustment expense, net of reinsurance recoverables |  |  | 275,958 |
Reinsurance recoverable on unpaid claims: |  |  |
Property |  | $ | 105,303 |
Other liability occurrence |  |  | 78,437 |
Other liability claims made |  |  | 100,629 |
Other |  |  | 127,904 |
Total reinsurance recoverable on unpaid claims |  |  | 412,273 |
Total reserve for losses and loss adjustment expenses |  | $ | 688,231 |
(1) Reflects the Company’s share of Loss and Loss Adjustment Expense related to non-proportional assumed reinsurance business. This amount reflects gross and net reserves related to this treaty and the ultimate incurred amount reflects IBNR only. The Company does not have direct access to individual claim information underlying the assumed reinsurance agreements. The Company does not use claim frequency information in the determination of loss reserves or for other internal purposes. Based on these considerations, the Company does not believe providing claims frequency information is practicable as it relates to this line of business.

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