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Liability for Unpaid Losses and Loss Adjustment Expenses | 9 Months Ended
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Sep. 30, 2023
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 nine months ended September 30, 2023 and 2022 on a GAAP basis:
| September 30,
| 2023 |  | 2022
Balance at January 1 | $ | 842,958 |  |  | $ | 250,642 |
Less: reinsurance recoverable on unpaid losses | 732,254 |  |  | 176,096 |
Net balance at January 1 | $ | 110,704 |  |  | $ | 74,546 |
Incurred related to: |  |  |
Current year | 62,756 |  |  | 101,899 |
Prior years | (11,665) |  |  | (8,787) |
Total incurred | $ | 51,091 |  |  | $ | 93,112 |
Paid related to: |  |  |
Current year | 40,768 |  |  | 40,633 |
Prior years | 15,000 |  |  | 29,877 |
Total paid | $ | 55,768 |  |  | $ | 70,510 |
Net balance at September 30 | $ | 106,027 |  |  | $ | 97,148 |
Plus: reinsurance recoverable on unpaid losses | 337,379 |  |  | 443,034 |
Balance at September 30 | $ | 443,406 |  |  | $ | 540,182 |
Composition of reserve for unpaid losses and LAE: |  |  |
Case reserves | $ | 138,666 |  |  | $ | 106,207 |
IBNR reserves | 304,740 |  |  | 433,975 |
Balance at September 30 | $ | 443,406 |  |  | $ | 540,182 |
Based upon our internal analysis and our review of the annual statement of actuarial opinion provided by our actuarial consultants at December 31, 2022, 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 favorable development in both 2023 and 2022 related to prior year losses. This favorable development came as a result of re-estimating ultimate losses in 2023 based on historical loss trends. The loss payments made by the Company during the nine months ended September 30, 2023, were lower than the loss payments made during the nine months ended September 30, 2022, due to the settling of prior year catastrophe claims, with no similar catastrophe activity occurring in 2023. IBNR reserves and reinsurance recoverable on unpaid losses also decreased when compared to the prior period as a result of Hurricane Ian.

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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 -Topic 944 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//944/tableOfContent + Details
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