• Filing Date: 2019-03-08
  • Form Type: 10-K
  • Description: Annual report
v3.10.0.1
Losses and Loss Adjustment Expenses
12 Months Ended
Dec. 31, 2018
Insurance [Abstract]  
Losses and Loss Adjustment Expenses
Note 16 — Losses and Loss Adjustment Expenses
The liability for losses and 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. See 
Loss and Loss Adjustment Expenses
 in Note 2 — “Summary of Significant Accounting Policies.”
The Company writes insurance primarily in the state of Florida, which could be exposed to hurricanes or other natural catastrophes. The occurrence of a major catastrophe could have a significant effect on the Company’s quarterly results and cause a temporary disruption of the 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.
Activity in the liability for losses and LAE is summarized as follows:
 
  
Years Ended December 31,
 
  
2018
  
2017
  
2016
 
Net balance, beginning of year*
 $97,818  $70,492  $51,690 
  
 
 
  
 
 
  
 
 
 
Incurred, net of reinsurance, related to:
            
Current year
  96,860   146,922   104,128 
Prior years
  12,468   18,707   20,539 
  
 
 
  
 
 
  
 
 
 
Total incurred, net of reinsurance
  109,328   165,629   124,667 
  
 
 
  
 
 
  
 
 
 
Paid, net of reinsurance, related to:
            
Current year
  (54,698)  (87,770  (64,812
Prior years
  (57,622)  (50,533  (41,053
  
 
 
  
 
 
  
 
 
 
Total paid, net of reinsurance
  (112,320  (138,303  (105,865
  
 
 
  
 
 
  
 
 
 
Net balance, end of year
  94,826   97,818   70,492 
Add: reinsurance recoverable
  112,760   100,760   —   
  
 
 
  
 
 
  
 
 
 
Gross balance, end of year
 $207,586  $198,578  $70,492 
  
 
 
  
 
 
  
 
 
 
 
*
Net balance represents 
beginning-of-period
 liability for unpaid losses and LAE less 
beginning-of-period
 reinsurance recoverable for unpaid losses and LAE.
The establishment of loss reserves is an inherently uncertain process and changes in loss reserve estimates are expected as these estimates are subject to the outcome of future events. Changes in estimates, or differences between estimates and amounts ultimately paid, are reflected in the operating results of the period during which such adjustments are adjusted. During the year ended December 31, 2018, the Company incurred approximately $16,520 of net losses related to Hurricane Michael and experienced unfavorable development of $12,468, of which $9,614 
pertains to claims in the 2015 and 2016 loss years. The 2018 prior year development was driven by continued reserve strengthening in response to trends involving assignment of insurance benefits and litigation and a 
$2,101
increase in 2016 loss reserves related to Hurricane Matthew. Loss reserves for 2017 Hurricane Irma were increased during 2018 by 
$144
million, all of which is recoverable under reinsurance agreements
.
The following is information about incurred and paid claims development as of December 31, 2018, net of reinsurance, as well as cumulative claim frequency and the total of 
incurred-but-not-reported
 liabilities plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2015 to 2012 is presented as supplementary information and is unaudited.
Homeowners Multi-peril and Dwelling Fire Insurance (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2018
 
 
 
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
 
 
Total of
IBNR Plus
Expected
Development
 
 
Cumulative
Number of
Reported
Claims
 
 
 
For the Years Ended December 31,
 
 
Reported
 
 
(Not in Dollar
 
Year
 
2012
 
 
2013
 
 
2014
 
 
2015
 
 
2016
 
 
2017
 
 
2018
 
 
Claims
 
 
Amounts)(b)
 
2012
 
$
66,425
 
 
$
62,742
 
 
$
64,083
 
 
$
66,505
 
 
$
67,058
 
 
$
66,465
 
 
$
67,220
 
 
$
30
 
 
 
6,618
 
2013
 
 
 
 
 
67,579
 
 
 
69,932
 
 
 
69,906
 
 
 
72,015
 
 
 
71,604
 
 
 
73,763
 
 
 
546
 
 
 
7,008
 
2014
 
 
 
 
 
 
 
 
75,810
 
 
 
81,773
 
 
 
84,917
 
 
 
88,053
 
 
 
90,084
 
 
 
2,068
 
 
 
7,657
 
2015
 
 
 
 
 
 
 
 
 
 
 
78,017
 
 
 
90,902
 
 
 
96,173
 
 
 
101,272
 
 
 
3,554
 
 
 
7,649
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
81,446
 
 
 
90,879
 
 
 
92,684
 
 
 
6,610
 
 
 
6,907
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
91,443
 
 
 
88,937
 
 
 
17,530
 
 
 
5,701
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
79,436
 
 
 
32,068
 
 
 
4,188
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
593,396
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Paid Claims and Allocated Claim Adjustment Expenses,
Net of Reinsurance
 
 
 
For the Years Ended December 31,
 
Year
 
2012
 
 
2013
 
 
2014
 
 
2015
 
 
2016
 
 
2017
 
 
2018
 
2012
 
$
36,914
 
 
$
53,225
 
 
$
59,041
 
 
$
62,836
 
 
$
64,667
 
 
$
65,903
 
 
$
67,059
 
2013
 
 
 
 
 
40,240
 
 
 
57,374
 
 
 
64,257
 
 
 
68,106
 
 
 
70,224
 
 
 
72,492
 
2014
 
 
 
 
 
 
 
 
47,650
 
 
 
68,897
 
 
 
77,712
 
 
 
82,463
 
 
 
87,125
 
2015
 
 
 
 
 
 
 
 
 
 
 
50,939
 
 
 
76,042
 
 
 
87,784
 
 
 
95,179
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
51,663
 
 
 
73,037
 
 
 
83,311
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
43,039
 
 
 
66,996
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
41,014
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
513,176
 
All outstanding liabilities before 2012, net of reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
547
 
Liabilities for LAE, net of reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
80,767
 
 
(a)
Excludes losses from Wind-only insurance (2012 through 2018), any hurricane event prior to 2018 and Hurricane Michael (2018).
(b)
The cumulative number of reported claims is measured as the number of 
per-policyholder,
 
per-event
 claims for all coverages regardless of whether the claim results in loss or expense to the Company.
 
Homeowners Wind-only Insurance
(a)
*
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2018
 
 
 
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
 
 
Total of
IBNR
Plus
Expected
Development
 
 
Cumulative
Number of
Reported
Claims
 
 
 
For the Years Ended December 31,
 
 
Reported
 
 
(Not in Dollar
 
Year
 
2012
 
 
2013
 
 
2014
 
 
2015
 
 
2016
 
 
2017
 
 
2018
 
 
Claims
 
 
Amounts)(b)
 
2015
 
$
 
 
$
 
 
$
 
 
$
308
 
 
$
401
 
 
$
569
 
 
$
692
 
 
$
110
 
 
 
100
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,005
 
 
 
1,314
 
 
 
1,814
 
 
 
220
 
 
 
228
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,529
 
 
 
1,119
 
 
 
330
 
 
 
153
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
798
 
 
 
439
 
 
 
108
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
4,423
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Paid Claims and Allocated Claim Adjustment Expenses,
Net of Reinsurance
 
 
 
For the Years Ended December 31,
 
Year
 
2012
 
 
2013
 
 
2014
 
 
2015
 
 
2016
 
 
2017
 
 
2018
 
2015
 
$
 
 
$
 
 
$
 
 
$
156
 
 
$
332
 
 
$
465
 
 
$
582
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
689
 
 
 
1,155
 
 
 
1,405
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
484
 
 
 
786
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
216
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,989
 
All outstanding liabilities before 2012, net of reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities for LAE, net of reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,434
 
 
*
The Company began writing Homeowners Wind-only insurance in 2015.
 
(a)   Excludes losses from multi-peril and dwelling fire insurance (2012 through 2018), any hurricane event prior to 2018 and Hurricane Michael (2018).
(b)   The cumulative number of reported claims is measured as the number of per-policyholder, per-event claims for all coverages regardless of whether the claim results in loss or expense to the Company.
 
Homeowners Wind-only Insurance
(a)
*
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2018
 
 
 
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
 
 
Total of
IBNR
Plus
Expected
Development
 
 
Cumulative
Number of
Reported
Claims
 
 
 
For the Years Ended December 31,
 
 
Reported
 
 
(Not in Dollar
 
Year
 
2012
 
 
2013
 
 
2014
 
 
2015
 
 
2016
 
 
2017
 
 
2018
 
 
Claims
 
 
Amounts)(b)
 
2015
 
$
 
 
$
 
 
$
 
 
$
308
 
 
$
401
 
 
$
569
 
 
$
692
 
 
$
110
 
 
 
100
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,005
 
 
 
1,314
 
 
 
1,814
 
 
 
220
 
 
 
228
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,529
 
 
 
1,119
 
 
 
330
 
 
 
153
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
798
 
 
 
439
 
 
 
108
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
4,423
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Paid Claims and Allocated Claim Adjustment Expenses,
Net of Reinsurance
 
 
 
For the Years Ended December 31,
 
Year
 
2012
 
 
2013
 
 
2014
 
 
2015
 
 
2016
 
 
2017
 
 
2018
 
2015
 
$
 
 
$
 
 
$
 
 
$
156
 
 
$
332
 
 
$
465
 
 
$
582
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
689
 
 
 
1,155
 
 
 
1,405
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
484
 
 
 
786
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
216
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,989
 
All outstanding liabilities before 2012, net of reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities for LAE, net of reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,434
 
 
*
The Company began writing Homeowners Wind-only insurance in 2015.
 
(a)   Excludes losses from multi-peril and dwelling fire insurance (2012 through 2018), any hurricane event prior to 2018 and Hurricane Michael (2018).
(b)   The cumulative number of reported claims is measured as the number of per-policyholder, per-event claims for all coverages regardless of whether the claim results in loss or expense to the Company.
 
 
Losses Specific to Any Hurricane Event prior to 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2018
 
 
 
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
 
 
Total of
IBNR Plus
Expected
Development
 
 
Cumulative
Number of
Reported
Claims
 
 
 
For the Years Ended December 31,
 
 
Reported
 
 
(Not in Dollar
 
Year
 
2012
 
 
2013
 
 
2014
 
 
2015
 
 
2016
 
 
2017
 
 
2018
 
 
Claims
 
 
Amounts)(b)
 
2016
 
$
 
 
$
 
 
$
 
 
$
 
 
$
21,414
 
 
$
24,126
 
 
$
26,211
 
 
$
2,005
 
 
 
2,415
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
53,602
 
 
 
54,080
 
 
 
6,508
 
 
 
19,907
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22
 
 
 
 
 
 
952
 
Total
 
 
$
80,313
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Paid Claims and Allocated Claim Adjustment Expenses,
Net of Reinsurance
For the Years Ended December 31,
 
Year
 
 
2012
 
 
2013
 
 
2014
 
 
2015