Liability for Unpaid Losses and Loss Adjustment Expenses

6 Months Ended

Jun. 30, 2025

Liability for unpaid losses and loss adjustment expenses

10)

LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSE (LAE)

The Company determines its 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 the Company's reserve for unpaid losses for the six months ended June 30, 2025 and 2024 on a GAAP basis:


	2025			2024
Balance at January 1	$	322,087		$	347,738
Less: reinsurance recoverable on unpaid losses		249,276			271,736
Net balance at January 1		72,811			76,002

Incurred related to:
Current year		30,398			28,773
Prior years		(3,469	)		(1,022	)
Total incurred		26,929			27,751
Paid related to:
Current year		22,781			23,520
Prior years		14,652			21,407
Total paid		37,433			44,927

Net balance at June 30		62,307			58,826
Plus: reinsurance recoverable on unpaid losses		156,935			152,607
Balance at June 30		219,242			211,433

Composition of reserve for unpaid losses and LAE:
Case reserves		37,258			73,261
IBNR reserves		181,984			138,172
Balance at June 30	$	219,242		$	211,433

Based upon the Company's internal analysis and the Company's review of the annual statement of actuarial opinion provided by its actuarial consultants at December 31, 2024, the Company believes 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, the Company had favorable development in the first half of 2025 and 2024 related to prior year losses. This development came as a result of re-estimating ultimate losses in 2025 and 2024 based on historical loss trends. The prior year loss payments made by the Company during the six months ended June 30, 2025 were lower than the loss payments made during the six months ended June 30, 2024, driven by decreased catastrophe and non-catastrophe loss payments. The current year loss payments made by the Company during the six months ended June 30, 2025 and June 30, 2024 remained relatively flat. Case reserves on unpaid losses also decreased when compared to the prior period as a result of the continued settlement of prior year claims, offset by increases to IBNR reserves as a result of Hurricane Milton which made landfall in the fourth quarter of 2024. Reinsurance recoverable remained relatively flat year over year.