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6. Property and Casualty Insurance Activity (Tables)
 6 Months Ended
Jun. 30, 2019
Insurance [Abstract]  
Schedule of earned premiums
     Direct      Assumed      Ceded      Net  
                         
Six months ended June 30, 2019                        
 Premiums written   $ 82,309,827     $ 77     $ (15,327,796 )   $ 66,982,108  
 Change in unearned premiums     (6,456,216 )     202       271,074       (6,184,940 )
 Premiums earned   $ 75,853,611     $ 279     $ (15,056,722 )   $ 60,797,168  
                                 
Six months ended June 30, 2018                                
 Premiums written   $ 68,389,960     $ 824     $ (16,725,724 )   $ 51,665,060  
 Change in unearned premiums     (5,495,329 )     3,064       769,436     $ (4,722,829 )
 Premiums earned   $ 62,894,631     $ 3,888     $ (15,956,288 )   $ 46,942,231  
                                 
Three months ended June 30, 2019                                
 Premiums written   $ 44,821,279     $ 111     $ (8,199,887 )   $ 36,621,503  
 Change in unearned premiums     (5,828,149 )     7       407,918       (5,420,224 )
 Premiums earned   $ 38,993,130     $ 118     $ (7,791,969 )   $ 31,201,279  
                                 
Three months ended June 30, 2018                                
 Premiums written   $ 36,863,677     $ 488     $ (8,899,489 )   $ 27,964,676  
 Change in unearned premiums     (4,486,460 )     1,163       625,235       (3,860,062 )
 Premiums earned   $ 32,377,217     $ 1,651     $ (8,274,254 )   $ 24,104,614  
Schedule of loss and loss adjustment expenses
     Six months ended  
    June 30,    
    2019     2018  
             
 Balance at beginning of period   $ 56,197,106     $ 48,799,622  
 Less reinsurance recoverables     (15,671,247 )     (16,748,908 )
 Net balance, beginning of period     40,525,859       32,050,714  
                 
 Incurred related to:                
 Current year     40,689,147       28,215,069  
 Prior years     6,117,385       227,346  
 Total incurred     46,806,532       28,442,415  
                 
 Paid related to:                
 Current year     19,692,437       14,656,892  
 Prior years     13,999,258       10,977,023  
 Total paid     33,691,695       25,633,915  
                 
 Net balance at end of period     53,640,696       34,859,214  
 Add reinsurance recoverables     16,034,424       14,398,642  
 Balance at end of period   $ 69,675,120     $ 49,257,856  
Allocated claim adjustment expenses

All Lines of Business

(in thousands, except reported claims data)

 

    Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance    

As of

June 30, 2019

  
           Six Months Ended            Cumulative Number of Reported Claims by  
 Accident   For the Years Ended December 31,      June 30,             Accident  
  Year    2010      2011      2012      2013      2014      2015      2016      2017      2018      2019      IBNR      Year  
      (Unaudited 2010 - 2018)     (Unaudited)              
2010   $ 5,598     $ 5,707     $ 6,429     $ 6,623     $ 6,912     $ 6,853     $ 6,838     $ 6,840     $ 6,787     $ 6,787     $ -       1,617  
2011             7,603       7,678       8,618       9,440       9,198       9,066       9,144       9,171       9,181       37       1,914  
2012                     9,539       9,344       10,278       10,382       10,582       10,790       10,791       11,030       42       4,704 (1)
2013                             10,728       9,745       9,424       9,621       10,061       10,089       10,464       67       1,561  
2014                                     14,193       14,260       14,218       14,564       15,023       16,294       176       2,133  
2015                                             22,340       21,994       22,148       22,491       23,133       123       2,555  
2016                                                     26,062       24,941       24,789       27,112       68       2,868  
2017                                                             31,605       32,169       33,895       895       3,364  
2018                                                                     54,455       54,067       3,944       4,137  
2019                                                                             38,622       13,451       1,865  
                                                                      Total     $ 230,585                  

 

(1) Reported claims for accident year 2012 includes 3,406 claims from Superstorm Sandy.

  

All Lines of Business

(in thousands)

 

    Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance    
Accident   For the Years Ended December 31,  

Six Months Ended

June 30,

    
Year   2010     2011     2012   2013     2014     2015     2016     2017     2018   2019    
    (Unaudited 2010 - 2018)   (Unaudited)    
                                                           
2010   $ 2,566     $ 3,947     $ 4,972   $ 5,602     $ 6,323     $ 6,576     $ 6,720     $ 6,772     $ 6,780   $ 6,780

 

  
2011             3,740       5,117     6,228       7,170       8,139       8,540       8,702       8,727     8,773    
2012                     3,950     5,770       7,127       8,196       9,187       10,236       10,323     10,420    
2013                           3,405       5,303       6,633       7,591       8,407       9,056     9,212    
2014                                   5,710       9,429       10,738       11,770       13,819     14,031    
2015                                           12,295       16,181       18,266       19,984     20,326    
2016                                                   15,364       19,001       21,106     21,910    
2017                                                           16,704       24,820     27,024    
2018                                                                   32,383     41,894    
2019                                                                         18,803    
                                                                  Total   $ 179,173    
                                                                               
Net liability for unpaid loss and allocated loss adjustment expenses for the accident years presented                            $  51,412     
All outstanding liabilities before 2010, net of reinsurance                              107     
Liabilities for loss and allocated loss adjustment expenses, net of reinsurance                            $  51,519     

 
Reconciliation of the net incurred and paid claims
    As of  
(in thousands)  

June 30,

2019

  
Liabilities for loss and loss adjustment expenses, net of reinsurance   $ 51,519  
Total reinsurance recoverable on unpaid losses     16,034  
Unallocated loss adjustment expenses     2,122  
Total gross liability for loss and LAE reserves   $ 69,675  
Schedule of line of business
  Treaty Year
 

July 1,

2019

  

July 1,

2018

  

July 1,

2017

  to   to   to
Line of Business

June 30,

2020

  

June 30,

2019

  

June 30,

2018

                 
Personal Lines:                
Homeowners, dwelling fire and canine legal liability                
 Quota share treaty:                
 Percent ceded   None     10%     20%
 Risk retained  $   1,000,000    $   900,000   $   800,000
 Losses per occurrence subject to quota share reinsurance coverage   None    $   1,000,000   $   1,000,000
 Excess of loss coverage and facultative facility above quota share coverage (1)  $   10,000,000    $   9,000,000   $   9,000,000
           in excess of      in excess of
         $   1,000,000   $   1,000,000
 Total reinsurance coverage per occurrence  $   9,000,000    $   9,100,000   $   9,200,000
 Losses per occurrence subject to reinsurance coverage  $   10,000,000    $   10,000,000   $   10,000,000
 Expiration date   June 30, 2020     June 30, 2019     June 30, 2019
                 
 Personal Umbrella                
 Quota share treaty:                
 Percent ceded - first $1,000,000 of coverage   90%     90%     90%
 Percent ceded - excess of $1,000,000 dollars of coverage   100%     100%     100%
 Risk retained  $   100,000    $   100,000   $   100,000
 Total reinsurance coverage per occurrence  $   4,900,000    $   4,900,000   $   4,900,000
 Losses per occurrence subject to quota share reinsurance coverage  $   5,000,000    $   5,000,000   $   5,000,000
 Expiration date   June 30, 2020     June 30, 2019     June 30, 2018
                 
Commercial Lines:                
 General liability commercial policies                
 Quota share treaty   None     None     None
 Risk retained  $   750,000    $   750,000   $   750,000
 Excess of loss coverage above risk retained  $   3,750,000    $   3,750,000   $   3,750,000
     in excess of      in excess of      in excess of
   $   750,000    $   750,000   $   750,000
 Total reinsurance coverage per occurrence  $   3,750,000    $   3,750,000   $   3,750,000
 Losses per occurrence subject to reinsurance coverage  $   4,500,000    $   4,500,000   $   4,500,000
                 
 Commercial Umbrella                
 Quota share treaty:   None            
 Percent ceded - first $1,000,000 of coverage         90%     90%
 Percent ceded - excess of $1,000,000 of coverage         100%     100%
 Risk retained        $   100,000   $   100,000
 Total reinsurance coverage per occurrence        $   4,900,000   $   4,900,000
 Losses per occurrence subject to quota share reinsurance coverage        $   5,000,000   $   5,000,000
 Expiration date         June 30, 2019     June 30, 2018
                 
Catastrophe Reinsurance:                
Initial loss subject to personal lines quota share treaty   None    $   5,000,000   $   5,000,000
 Risk retained per catastrophe occurrence (2)  $   7,500,000    $   4,500,000   $   4,000,000
 Catastrophe loss coverage in excess of quota share coverage (3)  $   602,500,000    $   445,000,000   $   315,000,000
 Reinstatement premium protection (4) (5) (6)    Yes      Yes      Yes

 

(1) For personal lines, includes the addition of an automatic facultative facility allowing KICO to obtain homeowners single risk coverage up to $10,000,000 in total insured value, which covers direct losses from $3,500,000 to $10,000,000.

 

(2) Plus losses in excess of catastrophe coverage.

 

(3) Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts. Duration of 168 consecutive hours for a catastrophe occurrence from windstorm, hail, tornado, hurricane and cyclone.

 

(4) Effective July 1, 2017, reinstatement premium protection for $145,000,000 of catastrophe coverage in excess of $5,000,000.

 

(5) Effective July 1, 2018, reinstatement premium protection for $210,000,000 of catastrophe coverage in excess of $5,000,000.

 

(6) Effective July 1, 2019, reinstatement premium protection for $292,500,000 of catastrophe coverage in excess of $7,500,000.

 
Schedule of single maximum risks under treaties

The single maximum risks per occurrence to which the Company is subject under the treaties effective July 1, 2018 and 2017 are as follows:

 

    July 1, 2018 - June 30, 2019     July 1, 2017 - June 30, 2018
Treaty   Range of Loss    Risk Retained    Range of Loss   Risk Retained 
Personal Lines (1)    Initial $1,000,000   $900,000    Initial $1,000,000   $800,000
     $1,000,000 - $10,000,000    None(2)    $1,000,000 - $10,000,000    None(2)
     Over $10,000,000   100%    Over $10,000,000   100%
                 
Personal Umbrella    Initial $1,000,000   $100,000    Initial $1,000,000   $100,000
     $1,000,000 - $5,000,000    None    $1,000,000 - $5,000,000    None
     Over $5,000,000   100%    Over $5,000,000   100%
                 
Commercial Lines    Initial $750,000   $750,000    Initial $750,000   $750,000
     $750,000 - $4,500,000    None(3)    $750,000 - $4,500,000    None(3)
     Over $4,500,000   100%    Over $4,500,000   100%
                 
Commercial Umbrella    Initial $1,000,000   $100,000    Initial $1,000,000   $100,000
     $1,000,000 - $5,000,000    None    $1,000,000 - $5,000,000    None
     Over $5,000,000   100%    Over $5,000,000   100%
                 
Catastrophe (4)    Initial $5,000,000   $4,500,000    Initial $5,000,000   $4,000,000
     $5,000,000 - $450,000,000    None    $5,000,000 - $320,000,000    None
     Over $450,000,000   100%    Over $320,000,000   100%

 

(1) Treaty for July 1, 2017 – June 30, 2018 and July 1, 2018 – June 30, 2019 is a two-year treaty with expiration date of June 30, 2019.

 

(2) Covered by excess of loss treaties up to $3,500,000 and by facultative facility from $3,500,000 to $10,000,000.

 

(3) Covered by excess of loss treaties.

 

(4) Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts.

 

The single maximum risks per occurrence to which the Company is subject under the treaty year shown below are as follows:

 

    July 1, 2019 - June 30, 2020
Treaty     Range of Loss     Risk Retained 
Personal Lines (1)    Initial $1,000,000   $1,000,000
     $1,000,000 - $10,000,000    None(2) 
     Over $10,000,000    100%
         
Personal Umbrella     Initial $1,000,000    $100,000
     $1,000,000 - $5,000,000    None
     Over $5,000,000    100%
         
Commercial Lines     Initial $750,000    $750,000
     $750,000 - $4,500,000    None(3) 
     Over $4,500,000    100%
         
Commercial Umbrella     Initial $1,000,000    $100,000
     $1,000,000 - $5,000,000    None
     Over $5,000,000    100%
         
Catastrophe (4)    Initial $7,500,000    $7,500,000
     $7,500,000 - $610,000,000     None 
     Over $610,000,000    100%

 

(1) Personal lines quota share treaty was eliminated effective July 1, 2019. The 2017/2019 Treaty expired on a run-off basis.

 

(2) Covered by excess of loss treaties up to $3,500,000 and by facultative facility from $3,500,000 to $10,000,000.

 

(3) Covered by excess of loss treaties.

 

(4) Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts.

 
Schedule of ceding commission revenue
     Three months ended      Six months ended  
    June 30,         June 30,      
     2019      2018      2019      2018  
                         
 Provisional ceding commissions earned   $ 1,363,474     $ 2,145,775     $ 2,681,225     $ 4,213,280  
 Contingent ceding commissions earned     (687,779 )     (454,607 )     (727,847 )     (826,954 )
    $ 675,695     $ 1,691,168     $ 1,953,378     $ 3,386,326