• Filing Date: 2013-03-14
  • Form Type: 10-K
  • Description: Annual report
Losses and Loss Adjustment Expenses
12 Months Ended
Dec. 31, 2012
Losses and Loss Adjustment Expenses [Abstract]  
Losses and Loss Adjustment Expenses

Note 8 — Losses and Loss Adjustment Expenses

The liability for losses and loss adjustment expenses (“LAE”) is determined on an individual case basis for all claims reported. The liability also includes amounts for unallocated expenses, anticipated future claim development and losses incurred, but not reported.

Activity in the liability for unpaid losses and LAE is summarized as follows (in thousands):


    Years Ended December 31,  
    2012     2011     2010  

Balance, beginning of year

  $ 27,424       22,146       19,178  










Incurred related to:


Current year

    66,425       43,613       38,446  

Prior years

    (115     4,630       (779










Total incurred

    66,310       48,243       37,667  










Paid related to:


Current year

    (36,914     (26,132     (24,218

Prior years

    (15,652     (16,833     (10,481










Total paid

    (52,566     (42,965     (34,699










Balance, end of year

  $ 41,168       27,424       22,146  










The significant increase from 2011 to 2012 is primarily due to the increase in policy base as a result of the HomeWise assumption in November 2011 and the Citizens assumption in November 2012.

The Company writes insurance in the state of Florida, which could be exposed to hurricanes or other natural catastrophes. Although the occurrence of a major catastrophe could have a significant effect on our monthly or quarterly results, the Company believes that such an event would not be so material as to disrupt the overall normal operations of the Company. However, the Company is unable to predict the frequency or severity of any such events that may occur in the near term or thereafter.