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Liability for Unpaid Losses and Loss Adjustment Expenses | 9 Months Ended
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Sep. 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 September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Balance at beginning of period | $ | 278,658 |  |  | $ | 147,659 |  |  | $ | 322,465 |  |  | $ | 267,760 |
Less: Reinsurance recoverable | (113,157) |  |  | (26,107) |  |  | (119,522) |  |  | (123,221) |
Net balance at beginning of period | 165,501 |  |  | 121,552 |  |  | 202,943 |  |  | 144,539 |
Incurred related to: |  |  |  |  |  |  |
Current year | 176,092 |  |  | 208,392 |  |  | 480,782 |  |  | 489,966 |
Prior years | 11,489 |  |  | 30,085 |  |  | 17,983 |  |  | 34,904 |
Total incurred | 187,581 |  |  | 238,477 |  |  | 498,765 |  |  | 524,870 |
Paid related to: |  |  |  |  |  |  |
Current year | 180,473 |  |  | 172,977 |  |  | 386,302 |  |  | 355,479 |
Prior years | 42,841 |  |  | 43,661 |  |  | 185,638 |  |  | 170,539 |
Total paid | 223,314 |  |  | 216,638 |  |  | 571,940 |  |  | 526,018 |
Net balance at end of period | 129,768 |  |  | 143,391 |  |  | 129,768 |  |  | 143,391 |
Plus: Reinsurance recoverable | 82,720 |  |  | 59,329 |  |  | 82,720 |  |  | 59,329 |
Balance at end of period | $ | 212,488 |  |  | $ | 202,720 |  |  | $ | 212,488 |  |  | $ | 202,720 |
During the three months ended September 30, 2021, there was adverse prior years’ reserve development of $87.9 million gross, less $76.4 million ceded, resulting in $11.5 million net development. The direct and net prior years’ reserve development for the quarter ended September 30, 2021 was principally due to a direct increase in the ultimate losses for hurricanes of $81.7 million offset by ceded hurricane losses of $76.4 million resulting in net unfavorable development of $5.3 million. Direct losses increased for Hurricanes Irma and Sally. Excluding hurricanes, there was $6.2 million of direct and net prior years’ reserve development for the quarter ended September 30, 2021. This development, primarily from the 2019 and prior accident years, resulted from settlements on litigated claims exceeding prior estimated amounts. During the three months ended September 30, 2020, there was adverse prior years’ reserve development of $136.7 million gross, less $106.7 million ceded, resulting in $30.1 million net development. The net prior years’ reserve development for the quarter ended September 30, 2020 was principally due to increased ultimate losses and LAE for Hurricane Irma not recoverable from the Florida Hurricane Catastrophe Fund (”FHCF”) and increased prior years’ companion claims in the run-up to the expiration of the statutory limitations period for filing Hurricane Irma claims. During the nine months ended September 30, 2021, there was adverse prior years’ reserve development of $296.9 million gross, less $278.9 million ceded, resulting in $18.0 million net development. The direct and net prior year reserve development for the nine months ended September 30, 2021 was principally due to a direct increase in the ultimate losses for several hurricanes of $282.9 million, offset by ceded hurricane losses of $278.9 million, resulting in net unfavorable reserve development of $4.0 million. Direct losses increased for Hurricanes Irma, Sally, Michael and Matthew. Excluding hurricanes, there was $14.0 million of direct and net prior years’ reserve development for the nine months ended September 30, 2021. This development, primarily from the 2019 and prior accident years, resulted from settlements on litigated claims exceeding prior estimated amounts. During the nine months ended September 30, 2020, there was adverse prior years’ reserve development of $190.8 million gross, less $155.9 million ceded, resulting in $34.9 million net unfavorable development. The direct and net prior years’ reserve development for the nine months ended September 30, 2020 was principally due to increased ultimate losses and LAE for Hurricane Irma not recoverable from the FHCF and increased prior years’ companion claims in the run-up to the expiration of the statutory limitations period for Hurricane Irma. With respect to hurricanes occurring prior to July 1, 2020, Florida law barred new, supplemental or reopened claims for losses caused by the perils of windstorms or hurricanes unless notice was provided within three years of the event. In September 2020, the three-year period following Hurricane Irma expired. The Company continues to adjust and settle Hurricane Irma claims that were reported prior to the expiration of the three-year period. Effective July 1, 2021, the Florida legislature amended the law to require a new or reopened claim, whether or not attributable to a hurricane, to be filed within two years of the date of loss.

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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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