Liability for Unpaid Losses and Loss Adjustment Expenses

3 Months Ended

Mar. 31, 2022

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 March 31,
		2022		2021
Balance at beginning of period		$	346,216	$	322,465
Less: Reinsurance recoverable		(115,860)		(119,522)
Net balance at beginning of period		230,356		202,943
Incurred related to:
Current year		184,451		145,200
Prior years		655		(1,237)
Total incurred		185,106		143,963
Paid related to:
Current year		71,727		54,481
Prior years		164,656		95,316
Total paid		236,383		149,797
Net balance at end of period		179,079		197,109
Plus: Reinsurance recoverable		65,403		118,671
Balance at end of period		$	244,482	$	315,780

During the three months ended March 31, 2022, there was adverse prior years’ reserve development of $10.7 million gross, less $10.0 million ceded, resulting in $0.7 million net development. The direct and net prior years’ reserve development for the quarter ended March 31, 2022 was principally due to a direct increase in the ultimate losses for Hurricanes Irma and Matthew of $10.7 million offset by ceded hurricane losses of $10.0 million resulting in net unfavorable development of $0.7 million.

During the three months ended March 31, 2021, there was adverse prior years’ reserve development of $92.1 million gross, less $93.3 million ceded, resulting in $1.2 million net favorable development. The net favorable prior years’ reserve development for the quarter ended March 31, 2021 was principally due to an increase in ceded reserves for Hurricane Sally as a result of recoveries on losses outside of Florida, which have a lower attachment point offset by a reduction in Hurricane Irma recoveries representing previously ceded losses not subject to recovery. As a result, net prior years’ reserve development was favorable.