Note 5.

Liabilities for Unpaid Losses, Claims and Loss Adjustment Expenses

The roll-forward of liabilities for unpaid losses, claims and loss adjustment expenses, by major product, is as follows:

Property and Casualty Insurance Products	Six Months Ended June 30,
	2017			2016
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	49,556		$	51,200
Less: Reinsurance recoverable on unpaid losses		(9,806	)		(11,639	)
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net		39,750			39,561

Incurred related to:
Current accident year		17,306			17,721
Prior accident year development ⁽¹⁾		(1,090	)		(990	)
Total incurred		16,216			16,731

Paid related to:
Current accident year		5,631			5,347
Prior accident years		10,065			13,518
Total paid		15,696			18,865
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net		40,270			37,427
Plus: Reinsurance recoverable on unpaid losses		10,027			8,515
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	50,297		$	45,942

⁽¹⁾

In establishing property and casualty reserves, the Company initially reserves for losses at the higher end of the reasonable range if no other value within the range is determined to be more probable. Selection of such an initial loss estimate is an attempt by management to give recognition that initial claims information received generally is not conclusive with respect to legal liability, is generally not comprehensive with respect to magnitude of loss and generally, based on historical experience, will develop more adversely as time passes and more information becomes available. However, as a result, the Company generally experiences reserve redundancies when analyzing the development of prior year losses in a current period.

Medicare Supplement Insurance Products	Six Months Ended June 30,
	2017			2016
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	11,263		$	10,547
Less: Reinsurance recoverable on unpaid losses		(990	)		-
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net		10,273			10,547

Incurred related to:
Current accident year		33,674			30,336
Prior accident year development		587			(637	)
Total incurred		34,261			29,699

Paid related to:
Current accident year		24,301			21,370
Prior accident years		9,706			8,918
Total paid		34,007			30,288
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net		10,527			9,958
Plus: Reinsurance recoverable on unpaid losses		2,746			-
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	13,273		$	9,958

Other Life and Health Insurance Products	Six Months Ended June 30,
	2017			2016
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	1,743		$	2,123
Less: Reinsurance recoverable on unpaid losses		-			-
Beginning liabilities for unpaid losses, claims and loss adjustment expenses, net		1,743			2,123

Incurred related to:
Current accident year		3,995			3,904
Prior accident year development		(44	)		(206	)
Total incurred		3,951			3,698

Paid related to:
Current accident year		2,685			2,602
Prior accident years		1,524			1,450
Total paid		4,209			4,052
Ending liabilities for unpaid losses, claims and loss adjustment expenses, net		1,485			1,769
Plus: Reinsurance recoverable on unpaid losses		-			-
Ending liabilities for unpaid losses, claims and loss adjustment expenses, gross	$	1,485		$	1,769

Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred:

	Six Months Ended June 30,
	2017		2016
Total incurred losses	$	54,428	$	50,128
Cash surrender value and matured endowments		817		694
Benefit reserve changes		1,784		925
Total insurance benefits and losses incurred	$	57,029	$	51,747