Reserve for Claims

Changes in the reserve for claims for the years ended December 31 are summarized as follows based on the year in which the policies were written:



(in thousands)	2018			2017			2016
Balance, beginning of period	$	34,801		$	35,305		$	37,788
(Benefit) provision related to:
Current year	6,762			7,432			6,673
Prior years	(7,094		)	(4,121		)	(6,430		)
Total (benefit) provision charged to operations	(332		)	3,311			243
Claims paid, net of recoveries, related to:
Current year	(178		)	(75		)	(103		)
Prior years	(2,562		)	(3,740		)	(2,623		)
Total claims paid, net of recoveries	(2,740		)	(3,815		)	(2,726		)
Balance, end of year	$	31,729		$	34,801		$	35,305

The Company continually refines its reserve estimates as current loss experience develops and credible data emerges. Movements in the reserve related to prior periods were primarily the result of changes to estimates to better reflect the latest reported loss data. The 2018 decrease in the provision for claims compared with 2017 primarily related to favorable loss experience and higher levels of favorable loss development in 2018. The favorable development in 2018 was primarily related to policy years 2011 through 2017. Due to variances between actual and expected loss payments, loss development is subject to significant variability.

The Company does not recognize claim recoveries until an actual payment has been received by the Company. The Company realized claim recoveries of approximately $1.9 million, $570 thousand and $1.0 million during 2018, 2017 and 2016, respectively.

The provision for claims as a percentage of net premiums written was (0.2)%, 2.4% and 0.2% in 2018, 2017 and 2016, respectively.

A large claim is defined as a claim with incurred losses exceeding $500 thousand. Due to the small volume of large claims, the long-tail nature of title insurance claims and the inherent uncertainty in loss emergence patterns, large claim activity can vary significantly between policy years. The estimated development of large claims by policy year is therefore subject to significant changes as experience develops.

A summary of the Company’s reserve for claims, broken down into its components of known title claims and IBNR, follows:



(in thousands, except percentages)	2018		%	2017		%
Known title claims	$	3,007	9.5	$	4,646	13.4
IBNR	28,722		90.5	30,155		86.6
Total reserve for claims	$	31,729	100.0	$	34,801	100.0

In management’s opinion, the reserve for claims is adequate to cover claim losses which might result from pending and future claims.