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Property and Casualty Unpaid Claims and Claim Expenses | 12 Months Ended
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Dec. 31, 2018
Insurance Loss Reserves [Abstract] |
Property and Casualty Unpaid Claims and Claim Expenses | The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both gross and net (after reinsurance) bases. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the year gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets.
($ in thousands) |  | Years Ended December 31,
|  | 2018 |  | 2017 |  | 2016
Property and Casualty segment |  |  |  |  |  |  |  |  |
Gross reserves, beginning of year (1) |  | $ | 319,182 |  |  | $ | 307,757 |  |  | $ | 301,569 |
Less: reinsurance recoverables |  | 57,409 |  |  | 61,199 |  |  | 50,332 |
Net reserves, beginning of year (2) |  | 261,773 |  |  | 246,558 |  |  | 251,237 |
Incurred claims and claim expenses: |  |  |  |  |  |  |  |  |
Claims occurring in the current year |  | 547,959 |  |  | 498,989 |  |  | 471,099 |
Decrease in estimated reserves for claims occurring in prior years (3) |  | (300 | ) |  | (2,700 | ) |  | (7,000 | )
Total claims and claim expenses incurred (4) |  | 547,659 |  |  | 496,289 |  |  | 464,099 |
Claims and claim expense payments for claims occurring during: |  |  |  |  |  |  |  |  |
Current year |  | 369,194 |  |  | 333,385 |  |  | 323,025 |
Prior years |  | 162,783 |  |  | 147,689 |  |  | 145,753 |
Total claims and claim expense payments |  | 531,977 |  |  | 481,074 |  |  | 468,778 |
Net reserves, end of year (2) |  | 277,455 |  |  | 261,773 |  |  | 246,558 |
Plus: reinsurance recoverables |  | 89,725 |  |  | 57,409 |  |  | 61,199 |
Gross reserves, end of year (1) |  | $ | 367,180 |  |  | $ | 319,182 |  |  | $ | 307,757 |
____________________
(1) | Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Life and Retirement of $29,534 thousand, $28,567 thousand and $22,131 thousand as of December 31, 2018, 2017 and 2016, respectively, in addition to Property and Casualty reserves.
(2) | Reserves net of anticipated reinsurance recoverables.
(3) | Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs. Also refer to the paragraphs below for additional information regarding the reserve development recorded in 2018, 2017 and 2016.
(4) | Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Life and Retirement of $89,901 thousand, $86,017 thousand, and $76,905 thousand for the years ended December 31, 2018, 2017 and 2016, respectively, in addition to Property and Casualty amounts.
Underwriting results for Property and Casualty are significantly influenced by estimates of the Company's ultimate liability for insured events. There is a high degree of uncertainty inherent in the estimates of ultimate losses underlying the liability for unpaid claims and claim settlement expenses. This inherent uncertainty is particularly significant for liability-related exposures due to the extended period, often many years, which transpires between a loss event, receipt of related claims data from policyholders and ultimate settlement of the claim. Reserves for Property and Casualty claims include provisions for payments to be made on reported claims (case reserves), IBNR claims and associated settlement expenses (together, loss reserves). The process by which these reserves are established requires reliance upon estimates based on known facts and on interpretations of circumstances, including the Company's experience with similar cases and historical trends involving claim payments and related patterns, pending levels of unpaid claims and product mix, as well as other factors including court decisions, economic conditions, public attitudes and medical costs. The Company believes the Property and Casualty loss reserves are appropriately established based on available facts, laws, and regulations. The Company calculates and records a single best estimate of the reserve (which is equal to the actuarial point estimate) as of each reporting date, for each line of business and its coverages for reported losses and for IBNR losses and as a result believes no other estimate is better than the recognized amount. Due to uncertainties involved, the ultimate cost of losses may vary materially from recognized amounts. The Company continually updates loss estimates using both quantitative and qualitative information from its reserving actuaries and information derived from other sources. Adjustments may be required as information develops which varies from experience, or, in some cases, augments data which previously were not considered sufficient for use in determining liabilities. The effects of these adjustments may be significant and are charged or credited to income in the period in which the adjustments are made. Numerous risk factors will affect more than one product line. One of these factors is changes in claim department practices, including claim closure rates, number of claims closed without payment, the use of third-party claim adjusters and the level of needed case reserve estimated by the adjuster. Other risk factors include changes in claim frequency, changes in claim severity, regulatory and legislative actions, court actions, changes in economic conditions and trends (e.g., medical costs, labor rates and the cost of materials), the occurrence of unusually large or frequent catastrophic loss events, timeliness of claim reporting, the state in which the claim occurred and degree of claimant fraud. The extent of the impact of a risk factor will also vary by coverages within a product line. Individual risk factors are also subject to interactions with other risk factors within product line coverages. While all product lines are exposed to these risks, there are some loss types or product lines for which the financial effect will be more significant. For instance, given the relatively large proportion (approximately 80.0% as of December 31, 2018) of the Company's reserves that are in the longer-tail automobile liability coverages, regulatory and court actions, changes in economic conditions and trends, and medical costs could be expected to impact this product line more extensively than others. Reserves are established for claims as they occur for each line of business based on estimates of the ultimate cost to settle the claims. The actual loss results are compared to prior estimates and differences are recorded as re-estimates. The primary actuarial techniques (development of paid loss dollars, development of reported loss dollars, methods based on expected loss ratios and methods utilizing frequency and severity of claims) used to estimate reserves and provide for losses are applied to actual paid losses and reported losses (paid losses plus individual case reserves set by claim adjusters) for an accident year to create an estimate of how losses are likely to develop over time. An accident year refers to classifying claims based on the year in which the claims occurred. For estimating short-tail coverage reserves (e.g., homeowners and automobile physical damage), which comprise approximately 20.0% of the Company's total loss reserves as of December 31, 2018, the primary actuarial technique utilized is the development of paid loss dollars due to the relatively quick claim settlement period. As it relates to estimating long-tail coverage reserves (primarily related to automobile liability), which comprise approximately 80.0% of the Company's total loss reserves as of December 31, 2018, the primary actuarial technique utilized is the development of reported loss dollars due to the relatively long claim settlement period. In all of the loss estimation techniques referred to above, a ratio (development factor) is calculated which compares current results to results in the prior period for each accident year. Various development factors, based on historical results, are multiplied by the current experience to estimate the development of losses of each accident year from the current time period into the next time period. The development factors for the next time period for each accident year are compounded over the remaining calendar years to calculate an estimate of ultimate losses for each accident year. Occasionally, unusual aberrations in loss patterns are caused by factors such as changes in claim reporting, settlement patterns, unusually large losses, process changes, legal or regulatory environment changes, and other influences. In these instances, analyses of alternate development factor selections are performed to evaluate the effect of these factors and judgment is applied to make appropriate development factor assumptions needed to develop a best estimate of ultimate losses. Paid losses are then subtracted from estimated ultimate losses to determine the indicated loss reserves. The difference between indicated reserves and recorded reserves is the amount of reserve re-estimate. Reserves are re-estimated quarterly. When new development factors are calculated from actual losses, and they differ from estimated development factors used in previous reserve estimates, assumptions about losses and required reserves are revised based on the new development factors. Changes to reserves are recognized in the period in which development factor changes result in reserve re-estimates. Claim count estimates are also established for claims as they occur for each line of business based on estimates of the ultimate claim counts. (These counts are derived by counting the number of claimants by insurance coverage.) The primary actuarial techniques (development of paid claim counts and development of reported claim counts) used to estimate ultimate claim counts are applied to actual paid claim counts and reported claim counts (paid claims plus individual unpaid claims set by claim adjusters) for an accident year to create an estimate of how claims are likely to develop over time. An accident year refers to classifying claims based on the year in which the claim occurred. The ultimate claim count generally gives equal consideration to the results of the two actuarial techniques described. Occasionally, unusual aberrations in claim reporting patterns or claims payment patterns may occur. In these instances, analyses of alternate development factor selections are performed to evaluate the effect of these factors and judgment is applied to make appropriate development factor assumptions needed to develop a best estimate of ultimate claims. See tables on the following pages of Note 5 for details of the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration and tables illustrating the incurred and paid claims development information by accident year on a net basis for the lines of Homeowners, Auto Liability, and Auto Physical Damage, which represents 99.0% of the Company's incurred losses for 2018. Numerous actuarial estimates of the types described above are prepared each quarter to monitor losses for each line of business, including the line's individual coverages; for reported losses and IBNR. Often, several different estimates are prepared for each detailed component, incorporating alternative analyses of changing claim settlement patterns and other influences on losses, from which the Company selects the best estimate for each component, occasionally incorporating additional analyses and judgment, as described above. These estimates also incorporate the historical impact of inflation into reserve estimates, the implicit assumption being that a multi-year average development factor represents an adequate provision. Based on the Company's review of these estimates, as well as the review of the independent reserve studies, the best estimate of required reserves for each line of business, including the line's individual coverages, is determined by management and is recognized for each accident year, then the required reserves for each component are summed to create the reserve balances carried on the Company's Consolidated Balance Sheets. Based on the Company's products and coverages, historical experience, and various actuarial methodologies used to develop reserve estimates, the Company estimates that the potential variability of the Property and Casualty loss reserves within a reasonable probability of other possible outcomes may be approximately plus or minus 6.0% of reserves, which equates to plus or minus approximately $13.0 thousand of net income as of December 31, 2018. Although this evaluation reflects the most likely outcomes, it is possible the final outcome may fall below or above these estimates. Net favorable development of total reserves for Property and Casualty claims occurring in prior years was $300 thousand in 2018, $2,700 thousand in 2017 and $7,000 thousand in 2016. In 2018, the favorable development was predominantly the result of favorable severity trends in property for accident years 2016 and prior. In 2017, the favorable development was predominantly the result of favorable severity trends in property for accident years 2015 and prior. In 2016, the favorable development was predominantly the result of favorable severity trends in property for accident years 2014 and prior. The Company completes a detailed study of Property and Casualty reserves based on information available at the end of each quarter and year. Trends of reported losses (paid amounts and case reserves on claims reported to the Company) for each accident year are reviewed and ultimate loss costs for those accident years are estimated. The Company engages an independent property and casualty actuarial consulting firm to prepare an independent study of the Company's Property and Casualty reserves at December 31st of each year. The result of the independent actuarial study at December 31, 2018 was consistent with management's analysis and selected estimates and did not result in any adjustments to the Company's Property and Casualty reserves recognized. At the time each of the reserve analyses was performed, the Company believed that each estimate was based upon sound methodology and such methodologies were appropriately applied and that there were no trends which indicated the likelihood of future loss reserve development. The financial impact of the net reserve development was therefore accounted for in the period that the development was determined. No other adjustments were made in the determination of the liabilities during the periods covered by these consolidated financial statements. Management believes that, based on data currently available, it has reasonably estimated the Company's ultimate losses. Below is the average annual percentage payout of incurred claims by age, also referred to as a history of claims duration:
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years |  | 1 |  |  | 2 |  |  | 3 |  |  | 4 |  |  | 5 |  |  | 6 |  |  | 7 |  |  | 8 |  |  | 9 |  |  | 10 |
Homeowners |  | 78.5 | % |  | 17.3 | % |  | 2.4 | % |  | 0.9 | % |  | 0.7 | % |  | 0.2 | % |  | — |  |  | — |  |  | — |  |  | — |
Auto liability |  | 40.9 | % |  | 35.1 | % |  | 13.7 | % |  | 6.1 | % |  | 2.7 | % |  | 1.1 | % |  | 0.3 | % |  | 0.1 | % |  | — |  |  | — |
Auto physical damage |  | 95.6 | % |  | 4.4 | % |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
The following tables illustrate the incurred and paid claims development by accident year on a net basis for the lines of homeowners, auto liability and auto physical damage. Conditions and trends that have affected the development of these reserves in the past will not necessarily reoccur in the future. It may not be appropriate to use this cumulative history in the projection of future performance. The information about incurred and paid claims development for the years ended December 31, 2009 to 2017 is presented as unaudited supplementary information.
($ in thousands)
Homeowners |  |
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance |  |  |  |
Years Ended December 31, |  | As of December 31, 2018
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  |  |  |
Year |  | 2009 |  | 2010 |  | 2011 |  | 2012 |  | 2013 |  | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  |
2009 |  | $ | 113,274 |  |  | $ | 112,280 |  |  | $ | 112,970 |  |  | $ | 113,096 |  |  | $ | 113,357 |  |  | $ | 113,230 |  |  | $ | 113,216 |  |  | $ | 112,900 |  |  | $ | 112,958 |  |  | $ | 113,168 |  |  | $ | — |  |  | 21,810 |
2010 |  |  |  |  | 140,994 |  |  | 136,907 |  |  | 133,358 |  |  | 133,235 |  |  | 133,216 |  |  | 133,136 |  |  | 132,859 |  |  | 132,905 |  |  | 132,627 |  |  | — |  |  | 25,149 |
2011 |  |  |  |  |  |  |  | 150,141 |  |  | 150,334 |  |  | 150,791 |  |  | 148,860 |  |  | 148,755 |  |  | 148,414 |  |  | 148,370 |  |  | 148,079 |  |  | — |  |  | 29,530 |
2012 |  |  |  |  |  |  |  |  |  |  | 108,754 |  |  | 109,156 |  |  | 109,360 |  |  | 106,486 |  |  | 106,308 |  |  | 106,348 |  |  | 106,000 |  |  | — |  |  | 21,578 |
2013 |  |  |  |  |  |  |  |  |  |  |  |  |  | 105,584 |  |  | 107,489 |  |  | 103,982 |  |  | 102,407 |  |  | 102,345 |  |  | 101,769 |  |  | 88 |  |  | 19,221 |
2014 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 111,647 |  |  | 113,505 |  |  | 109,059 |  |  | 106,844 |  |  | 106,554 |  |  | 257 |  |  | 20,083 |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 111,706 |  |  | 115,134 |  |  | 114,404 |  |  | 114,053 |  |  | 362 |  |  | 18,706 |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 115,931 |  |  | 118,604 |  |  | 117,009 |  |  | 724 |  |  | 19,830 |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 126,285 |  |  | 129,818 |  |  | 759 |  |  | 19,741 |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 166,793 |  |  | 27,697 |  |  | 19,515 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total |  | $ | 1,235,870 |  |  |  |  |  |  |
($ in thousands)
Homeowners |  |  |  |
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance |  |  |  |
Years Ended December 31, |  |  |  |
Accident |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  |  |  |  |  |
Year |  | 2009 |  | 2010 |  | 2011 |  | 2012 |  | 2013 |  | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  |  |  |
2009 |  | $ | 81,570 |  |  | $ | 104,407 |  |  | $ | 108,217 |  |  | $ | 110,324 |  |  | $ | 112,554 |  |  | $ | 112,720 |  |  | $ | 112,827 |  |  | $ | 112,848 |  |  | $ | 112,851 |  |  | $ | 112,858 |  |  |  |  |
2010 |  |  |  |  | 98,190 |  |  | 124,326 |  |  | 129,790 |  |  | 132,246 |  |  | 132,523 |  |  | 132,604 |  |  | 132,599 |  |  | 132,602 |  |  | 132,602 |  |  |  |  |
2011 |  |  |  |  |  |  |  | 123,046 |  |  | 142,846 |  |  | 145,852 |  |  | 146,908 |  |  | 147,451 |  |  | 148,026 |  |  | 148,014 |  |  | 148,069 |  |  |  |  |
2012 |  |  |  |  |  |  |  |  |  |  | 84,260 |  |  | 101,566 |  |  | 104,203 |  |  | 105,156 |  |  | 105,561 |  |  | 105,909 |  |  | 105,993 |  |  |  |  |
2013 |  |  |  |  |  |  |  |  |  |  |  |  |  | 76,890 |  |  | 96,599 |  |  | 99,361 |  |  | 100,968 |  |  | 101,527 |  |  | 101,677 |  |  |  |  |
2014 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 83,314 |  |  | 103,030 |  |  | 105,704 |  |  | 106,081 |  |  | 106,258 |  |  |  |  |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 90,704 |  |  | 109,303 |  |  | 111,882 |  |  | 113,321 |  |  |  |  |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 95,772 |  |  | 113,186 |  |  | 115,053 |  |  |  |  |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 106,800 |  |  | 128,518 |  |  |  |  |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 130,548 |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total |  | 1,194,897 |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Outstanding prior to 2009 |  | 66 |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Prior years paid |  | — |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 41,039 |  |  |  |  |
($ in thousands)
Auto Liability |  |
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance |  |
Years Ended December 31, |  | As of December 31, 2018
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  |  |  |
Year |  | 2009 |  | 2010 |  | 2011 |  | 2012 |  | 2013 |  | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  |
2009 |  | $ | 159,934 |  |  | $ | 158,703 |  |  | $ | 153,662 |  |  | $ | 157,941 |  |  | $ | 151,418 |  |  | $ | 150,919 |  |  | $ | 150,568 |  |  | $ | 149,822 |  |  | $ | 149,888 |  |  | $ | 149,807 |  |  | $ | (64 | ) |  | 49,230 |
2010 |  |  |  |  | 157,712 |  |  | 160,058 |  |  | 156,369 |  |  | 154,222 |  |  | 152,483 |  |  | 151,653 |  |  | 149,818 |  |  | 149,425 |  |  | 149,542 |  |  | 3 |  |  | 48,942 |
2011 |  |  |  |  |  |  |  | 150,803 |  |  | 146,713 |  |  | 145,735 |  |  | 143,133 |  |  | 142,488 |  |  | 139,840 |  |  | 138,891 |  |  | 138,949 |  |  | 210 |  |  | 45,976 |
2012 |  |  |  |  |  |  |  |  |  |  | 156,448 |  |  | 153,815 |  |  | 150,336 |  |  | 149,346 |  |  | 147,594 |  |  | 145,847 |  |  | 145,620 |  |  | 305 |  |  | 45,984 |
2013 |  |  |  |  |  |  |  |  |  |  |  |  |  | 153,860 |  |  | 152,858 |  |  | 150,720 |  |  | 150,657 |  |  | 148,111 |  |  | 147,993 |  |  | 748 |  |  | 47,368 |
2014 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 155,105 |  |  | 157,249 |  |  | 158,470 |  |  | 159,937 |  |  | 159,794 |  |  | 1,887 |  |  | 49,380 |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 165,517 |  |  | 172,553 |  |  | 177,021 |  |  | 178,325 |  |  | 2,441 |  |  | 50,596 |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 180,380 |  |  | 184,440 |  |  | 184,567 |  |  | 5,637 |  |  | 51,934 |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 187,983 |  |  | 188,756 |  |  | 19,007 |  |  | 48,587 |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 200,314 |  |  | 71,139 |  |  | 43,522 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total |  | $ | 1,643,667 |  |  |  |  |  |  |
($ in thousands)
Auto Liability |  |  |  |
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance |  |  |  |
Years Ended December 31, |  |  |  |
Accident |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  |  |  |  |  |
Year |  | 2009 |  | 2010 |  | 2011 |  | 2012 |  | 2013 |  | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  |  |  |
2009 |  | $ | 60,011 |  |  | $ | 110,921 |  |  | $ | 133,568 |  |  | $ | 142,524 |  |  | $ | 146,383 |  |  | $ | 148,783 |  |  | $ | 149,608 |  |  | $ | 149,801 |  |  | $ | 149,855 |  |  | $ | 149,871 |  |  |  |  |
2010 |  |  |  |  | 63,416 |  |  | 118,345 |  |  | 137,012 |  |  | 144,255 |  |  | 147,337 |  |  | 148,751 |  |  | 149,247 |  |  | 149,364 |  |  | 149,439 |  |  |  |  |
2011 |  |  |  |  |  |  |  | 61,070 |  |  | 108,837 |  |  | 126,812 |  |  | 133,931 |  |  | 136,906 |  |  | 138,151 |  |  | 138,358 |  |  | 138,689 |  |  |  |  |
2012 |  |  |  |  |  |  |  |  |  |  | 61,279 |  |  | 109,574 |  |  | 127,185 |  |  | 138,641 |  |  | 142,916 |  |  | 144,622 |  |  | 145,121 |  |  |  |  |
2013 |  |  |  |  |  |  |  |  |  |  |  |  |  | 62,224 |  |  | 108,856 |  |  | 131,214 |  |  | 139,954 |  |  | 145,291 |  |  | 146,770 |  |  |  |  |
2014 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 61,329 |  |  | 117,468 |  |  | 139,463 |  |  | 149,059 |  |  | 155,758 |  |  |  |  |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 70,836 |  |  | 134,473 |  |  | 157,980 |  |  | 170,088 |  |  |  |  |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 73,073 |  |  | 140,901 |  |  | 166,815 |  |  |  |  |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 70,682 |  |  | 139,531 |  |  |  |  |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 77,528 |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total |  | 1,439,610 |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Outstanding prior to 2009 |  | 183 |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Prior years paid |  | — |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 204,240 |  |  |  |  |
($ in thousands)
Auto Physical Damage |  |
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance |  |
Years Ended December 31, |  | As of December 31, 2018
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total of Incurred- But-Not-Reported Liabilities Plus Expected Development on Reported Claims |  | Cumulative Number of Reported Claims
Accident |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  |  |  |
Year |  | 2009 |  | 2010 |  | 2011 |  | 2012 |  | 2013 |  | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  |
2009 |  | $ | 84,539 |  |  | $ | 83,515 |  |  | $ | 83,202 |  |  | $ | 82,635 |  |  | $ | 82,000 |  |  | $ | 81,986 |  |  | $ | 81,972 |  |  | $ | 81,963 |  |  | $ | 81,972 |  |  | $ | 81,941 |  |  | $ | — |  |  | 77,449 |
2010 |  |  |  |  | 84,112 |  |  | 83,420 |  |  | 83,103 |  |  | 83,046 |  |  | 83,052 |  |  | 83,050 |  |  | 83,036 |  |  | 83,028 |  |  | 83,018 |  |  | 2 |  |  | 81,581 |
2011 |  |  |  |  |  |  |  | 86,205 |  |  | 85,507 |  |  | 86,023 |  |  | 85,120 |  |  | 85,143 |  |  | 85,116 |  |  | 85,108 |  |  | 85,102 |  |  | 8 |  |  | 80,803 |
2012 |  |  |  |  |  |  |  |  |  |  | 83,770 |  |  | 82,337 |  |  | 83,402 |  |  | 83,431 |  |  | 83,354 |  |  | 83,342 |  |  | 83,334 |  |  | 8 |  |  | 78,163 |
2013 |  |  |  |  |  |  |  |  |  |  |  |  |  | 91,448 |  |  | 88,856 |  |  | 88,672 |  |  | 88,627 |  |  | 88,455 |  |  | 88,525 |  |  | 54 |  |  | 80,919 |
2014 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 95,572 |  |  | 95,634 |  |  | 95,422 |  |  | 95,239 |  |  | 95,232 |  |  | (21 | ) |  | 87,899 |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 99,291 |  |  | 97,994 |  |  | 97,624 |  |  | 97,455 |  |  | (188 | ) |  | 87,491 |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 112,430 |  |  | 109,515 |  |  | 109,348 |  |  | (207 | ) |  | 93,200 |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 115,483 |  |  | 111,798 |  |  | 924 |  |  | 91,160 |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 109,040 |  |  | (6,859 | ) |  | 91,070 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total |  | $ | 944,793 |  |  |  |  |  |  |
($ in thousands)
Auto Physical Damage |  |  |  |
Cumulative Paid Claims and Allocated Claim Adjustment Expense, Net of Reinsurance |  |  |  |
Years Ended December 31, |  |  |  |
Accident |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  | Unaudited |  |  |  |  |  |
Year |  | 2009 |  | 2010 |  | 2011 |  | 2012 |  | 2013 |  | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  |  |  |
2009 |  | $ | 78,456 |  |  | $ | 82,117 |  |  | $ | 82,039 |  |  | $ | 82,015 |  |  | $ | 82,000 |  |  | $ | 81,985 |  |  | $ | 81,973 |  |  | $ | 81,963 |  |  | $ | 81,955 |  |  | $ | 81,941 |  |  |  |  |
2010 |  |  |  |  | 79,329 |  |  | 83,120 |  |  | 83,103 |  |  | 83,087 |  |  | 83,067 |  |  | 83,051 |  |  | 83,036 |  |  | 83,028 |  |  | 83,015 |  |  |  |  |
2011 |  |  |  |  |  |  | 83,227 |  |  | 85,254 |  |  | 85,181 |  |  | 85,148 |  |  | 85,127 |  |  | 85,116 |  |  | 85,108 |  |  | 85,095 |  |  |  |  |
2012 |  |  |  |  |  |  |  |  | 80,519 |  |  | 83,418 |  |  | 83,372 |  |  | 83,355 |  |  | 83,347 |  |  | 83,342 |  |  | 83,326 |  |  |  |  |
2013 |  |  |  |  |  |  |  |  |  |  | 85,110 |  |  | 88,688 |  |  | 88,580 |  |  | 88,532 |  |  | 88,484 |  |  | 88,471 |  |  |  |  |
2014 |  |  |  |  |  |  |  |  |  |  |  |  | 88,939 |  |  | 95,444 |  |  | 95,266 |  |  | 95,256 |  |  | 95,258 |  |  |  |  |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 92,138 |  |  | 97,850 |  |  | 97,685 |  |  | 97,638 |  |  |  |  |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 106,459 |  |  | 109,686 |  |  | 109,536 |  |  |  |  |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 105,156 |  |  | 110,817 |  |  |  |  |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 103,559 |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total |  | 938,656 |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Outstanding prior to 2009 |  | — |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Prior years paid |  | — |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Liabilities for claims and claim adjustment expenses, net of reinsurance |  | $ | 6,137 |  |  |  |  |
The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the Consolidated Balance Sheet is as follows:
($ in thousands) |  | Years Ended December 31,
|  | 2018
Property and Casualty segment |  |  |
Net reserves |  |  |
Homeowners |  | $ | 41,039 |
Auto liability |  | 204,240 |
Auto physical damage |  | 6,137 |
Other short duration lines |  | 3,556 |
Total net reserves for unpaid claims and claim adjustment expense, net of reinsurance |  | 254,972 |
Reinsurance recoverable on unpaid claims |  |  |
Homeowners |  | 26,646 |
Auto liability |  | 55,971 |
Other short duration lines |  | 7,108 |
Total reinsurance recoverable on unpaid claims |  | 89,725 |
Insurance lines other than short duration (1) |  | 29,534 |
Unallocated claims adjustment expenses |  | 22,483 |
Total other than short duration and unallocated claims adjustment expenses |  | 52,017 |
Gross reserves, end of year (1) |  | $ | 396,714 |
____________________ (1) This line includes Retirement and Life reserves as included in the Consolidated Balance Sheet.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -URI http://asc.fasb.org/subtopic&trid=2560295 + Details
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