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Liability for Unpaid Losses and Loss Adjustment Expenses | 6 Months Ended
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Jun. 30, 2021
Insurance [Abstract] |
Liability for Unpaid Losses and Loss Adjustment Expenses | Liability for Unpaid Losses and Loss Adjustment Expenses Set forth in the following table is the change in liability for unpaid losses and LAE for the periods presented (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Balance at beginning of period | $ | 315,780 |  |  | $ | 195,978 |  |  | $ | 322,465 |  |  | $ | 267,760 |
Less: Reinsurance recoverable | (118,671) |  |  | (66,158) |  |  | (119,522) |  |  | (123,221) |
Net balance at beginning of period | 197,109 |  |  | 129,820 |  |  | 202,943 |  |  | 144,539 |
Incurred related to: |  |  |  |  |  |  |
Current year | 159,490 |  |  | 150,867 |  |  | 304,690 |  |  | 281,574 |
Prior years | 7,731 |  |  | 478 |  |  | 6,494 |  |  | 4,819 |
Total incurred | 167,221 |  |  | 151,345 |  |  | 311,184 |  |  | 286,393 |
Paid related to: |  |  |  |  |  |  |
Current year | 151,348 |  |  | 120,724 |  |  | 205,829 |  |  | 182,502 |
Prior years | 47,481 |  |  | 38,889 |  |  | 142,797 |  |  | 126,878 |
Total paid | 198,829 |  |  | 159,613 |  |  | 348,626 |  |  | 309,380 |
Net balance at end of period | 165,501 |  |  | 121,552 |  |  | 165,501 |  |  | 121,552 |
Plus: Reinsurance recoverable | 113,157 |  |  | 26,107 |  |  | 113,157 |  |  | 26,107 |
Balance at end of period | $ | 278,658 |  |  | $ | 147,659 |  |  | $ | 278,658 |  |  | $ | 147,659 |
For the three months ended June 30, 2021, there was adverse prior years’ reserve development of $116.9 million gross, less $109.2 million ceded, resulting in $7.7 million net development. The direct and net prior years’ reserve development for the quarter ended June 30, 2021 was principally due to a direct increase in the ultimate losses for hurricanes of $109.1 million offset by ceded hurricane losses of $109.2 million resulting in net favorable development of $0.1 million. Direct losses increased for Hurricanes Irma, Sally, Michael and Matthew. Ceded losses benefited from changes to estimated non-Florida reinsurance coverage which has a lower attachment point. As a result of ceded losses exceeding direct losses, net losses development on prior hurricanes was favorable during second quarter of 2021. Excluding hurricanes, there was $7.8 million of direct and net prior years’ reserve development for the quarter ended June 30, 2021. This development, from the 2019 and prior accident years, resulted from the settlement on litigated claims exceeding prior estimated amounts. During the three months ended June 30, 2020, there was adverse prior years’ reserve development of $11.6 million gross, less $11.1 million ceded, resulting in $0.5 million net development. The direct and net prior years’ reserve development for the quarter ended June 30, 2020 was principally due to an increase in ultimate losses and LAE for Hurricane Matthew. For the six months ended June 30, 2021, there was adverse prior years’ reserve development of $209.0 million gross, less $202.5 million ceded, resulting in $6.5 million net. The direct and net prior year reserve development for the six months ended June 30, 2021 was principally due to a direct increase in the ultimate losses for several hurricanes of $201.2 million offset by ceded hurricane losses of $202.5 million resulting in net favorable development of $1.3 million. Direct losses increased for Hurricanes Irma, Sally, Michael and Matthew. Ceded losses benefited from changes to estimated non-Florida reinsurance coverage which has a lower attachment point. This benefit was offset by increases in previously estimated losses and LAE on Hurricane Irma for claims which are not recoverable from the Florida Hurricane Catastrophe Fund (“FHCF”). Excluding major hurricanes, there was $7.8 million of direct and net prior years’ reserve development for the six months ended June 30, 2021. This development, from the 2019 and prior accident years, resulted from the settlement on litigated claims exceeding prior estimated amounts. For the six months ended June 30, 2020, there was adverse prior year reserve development of $54.1 million gross, less $49.3 million ceded, resulting in $4.8 million net. The direct and net prior year reserve development for the six months ended June 30, 2020 was principally due to increased ultimate losses and LAE for Hurricane Irma.

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