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Liability for Unpaid Losses and Loss Adjustment Expenses | 3 Months Ended
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Mar. 31, 2022
Insurance [Abstract] |
Liability for unpaid losses and loss adjustment expenses | LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSE (LAE) We determine the reserve for unpaid losses on an individual case basis for all incidents reported. The liability also includes amounts for incurred but not reported (IBNR) claims as of the balance sheet date. The table below shows the analysis of our reserve for unpaid losses for the three months ended March 31, 2022 and 2021 on a GAAP basis:
| March 31,
| 2022 |  | 2021
Balance at January 1 | $ | 1,084,450 |  |  | $ | 1,089,966 |
Less: reinsurance recoverable on unpaid losses | 749,600 |  |  | 674,746 |
Net balance at January 1 | $ | 334,850 |  |  | $ | 415,220 |
Incurred related to: |  |  |
Current year | 89,935 |  |  | 86,012 |
Prior years | 1,433 |  |  | 29,769 |
Total incurred | $ | 91,368 |  |  | $ | 115,781 |
Paid related to: |  |  |
Current year | 19,141 |  |  | 30,597 |
Prior years | 102,582 |  |  | 103,977 |
Total paid | $ | 121,723 |  |  | $ | 134,574 |
Net balance at March 31 | $ | 304,495 |  |  | $ | 396,427 |
Plus: reinsurance recoverable on unpaid losses | 662,719 |  |  | 821,364 |
Balance at March 31 | $ | 967,214 |  |  | $ | 1,217,791 |
Composition of reserve for unpaid losses and LAE: |  |  |
Case reserves | $ | 396,020 |  |  | $ | 432,537 |
IBNR reserves | 571,194 |  |  | 785,254 |
Balance at March 31 | $ | 967,214 |  |  | $ | 1,217,791 |
Based upon our internal analysis and our review of the annual statement of actuarial opinion provided by our actuarial consultants at December 31, 2021, we believe that the reserve for unpaid losses reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date. As reflected in the table above, we had adverse development in 2022 related to prior year losses. This adverse development came as a result of the strengthening of our catastrophe reserves in 2022 based on historical loss trends. The loss payments made by the Company during the three months ended March 31, 2022, were lower than the loss payments made during the three months ended March 31, 2021, due to the settling of claims related to the unprecedented catastrophe activity that took place in 2020. Case and IBNR reserves decreased when compared to the prior period as a result of Winter Storm Uri, which occurred in the first quarter of 2021. Reinsurance recoverable on unpaid losses decreased as a result of the higher frequency of 2020 catastrophe activity coupled with increases in our ceded losses related to Hurricane Irma and Winter Storm Uri in the first quarter of 2021.

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- Definition The entire disclosure for insurance products considered to be short-duration contracts because the contract provides insurance protection for a fixed period of short duration and enables the insurer to cancel the contract or to adjust the provisions of the contract at the end of any contract period, such as adjusting the amount of premiums charged or coverage provided, and on contracts on which amounts are paid but insurance risk is not transferred. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -URI https://asc.fasb.org/topic&trid=2303980 + Details
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