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Reserve for Losses and Loss Adjustment Expenses
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6 Months Ended |
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Jun. 30, 2013
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| Insurance [Abstract] | |
| Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The reserve for losses is established based on estimates of individual claims and actuarially determined estimates of future losses based on ProAssurance’s past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends and settlement patterns. Estimating reserves, and particularly liability reserves, is a complex process. Claims may be resolved over an extended period of time, often five years or more, and may be subject to litigation. Estimating losses for liability claims requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, reserve estimates may vary significantly from the eventual outcome. The assumptions used in establishing ProAssurance’s reserves are regularly reviewed and updated by management as new data becomes available. Changes to estimates of previously established reserves are included in earnings in the period in which the estimate is changed. ProAssurance recognized favorable net loss development of $38.5 million and $91.6 million related to previously established reserves for the three and six months ended June 30, 2013, respectively. The favorable net loss development reflected reductions in the Company's estimates of claims severity. Development recognized for the three months ended June 30, 2013 principally related to the 2006 through 2011 accident years. Development recognized for the six months ended June 30, 2013 principally related to the 2005 through 2011 accident years. For the three and six months ended June 30, 2012, ProAssurance recognized favorable net loss development of $60.1 million and $107.5 million, respectively, to reflect reductions in estimated claim severity principally for accident years 2004 through 2009. |