Liability for Unpaid Losses and Loss Adjustment Expenses | 13. Liability for Unpaid Losses and Loss Adjustment Expenses Consolidated Activity Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows: Years Ended December 31, (Dollars in thousands) 2022 2021 2020 Balance at beginning of period $ 759,904 $ 662,811 $ 630,181 Less: Ceded reinsurance receivables 94,443 82,158 76,273 Net balance at beginning of period 665,461 580,653 553,908 Incurred losses and loss adjustment expenses related to: Current year 367,298 376,306 367,739 Prior years ( 8,070 ) 8,658 ( 31,538 ) Total incurred losses and loss adjustment expenses 359,228 384,964 336,201 Paid losses and loss adjustment expenses related to: Current year 103,442 149,092 183,109 Prior years 161,864 151,064 126,347 Total paid losses and loss adjustment expenses 265,306 300,156 309,456 Net balance at end of period 759,383 665,461 580,653 Plus: Ceded reinsurance receivables 73,021 94,443 82,158 Balance at end of period $ 832,404 $ 759,904 $ 662,811 When analyzing loss reserves and prior year development, the Company considers many factors, including the frequency and severity of claims, loss trends, case reserve settlements that may have resulted in significant development, and any other additional or pertinent factors that may impact reserve estimates. During 2022, the Company decreased its prior accident year loss reserves by $ 8.1 million , which consisted of a $ 1.4 million decrease related to Commercial Specialty, a $ 1.5 million decrease related to Reinsurance Operations, and a $ 5.2 million decrease related to Exited Lines. The $ 1.4 million decrease in prior accident year loss reserves related to Commercial Specialty primarily consisted of the following: • General Liability: A $ 3.9 million increase mainly reflects higher than expected claims severity in accident years prior to 2006 and 2017 through 2021, partially offset by decreases in the 2006 through 2016 accident years. • Property: A $ 3.1 million decrease primarily recognizes lower than expected claims severity in the 2019 through 2021 accident years, partially offset by an increase in the 2015 and 2018 accident year. • Professional: A $ 2.2 million decrease primarily in 2008 through 2010 and 2012 through 2015 accident years. The $ 1.5 million decrease in prior accident year loss reserves related to Reinsurance Operations primarily consisted of the following: • Professional: A $ 3.6 million decrease was recognized in the 2016 accident year reflecting a reduction in the ultimate for the claims-made segment; the inception-to-date case incurred remains zero in this year. • General Liability: A $ 2.1 million increase in the 2019 through 2021 accident years based on reported information from a cedant. The $ 5.2 million decrease in prior accident year loss reserves related to Exited Lines primarily consisted of the following: • Property: A $ 4.6 million decrease primarily in the 2017 through 2019 and 2021 accident years, partially offset by increases in the 2016 and 2020 accident years. • General Liability: A $ 0.6 million decrease, primarily in the 2015 through 2017, 2019, and 2021 accident years, partially offset by increases in the 2018 and 2020 accident years. During 2021, the Company increased its prior accident year loss reserves by $ 8.7 million, which consisted of a $ 1.6 million increase related to Commercial Specialty, a $ 1.1 million decrease related to Reinsurance Operations, and a $ 8.2 million increase related to Exited Lines. The $ 1.6 million increase in prior accident year loss reserves related to Commercial Specialty primarily consisted of the following: • General Liability: A $ 0.1 million increase in aggregate with $ 2.9 million of favorable development in the construction defect reserve category and $ 3.0 million of adverse development in the other general liability reserve categories. The reduction in the construction defect reserve category recognizes lower than expected claims frequency and severity in accident years prior to 2005 and the 2005 through 2009, 2011 and 2014 accident years with a slight increase recognized in the 2016 accident year. For the other general liability reserve categories, higher than anticipated claims severity was the main driver of the increases, primarily in accident years 2005 through 2007, 2009 and 2017 through 2020 accident years, partially offset by decreases prior to 2005, 2008 and 2013 through 2016 accident years. • Property: A $ 1.9 million increase primarily recognizes higher than expected claims severity mainly in the 2016, 2018, and 2020 accident years, partially offset by a decrease in the 2015, 2017, and 2019 accident years. • Professional Liability: A $ 0.5 million decrease mainly in the 2019 and 2020 accident years, mainly reflecting lower than anticipated claims severity. The $ 1.1 million reduction of prior accident year loss reserves related to Reinsurance Operations primarily consisted of the following: • Professional: A $ 1.1 million decrease was recognized in professional lines mainly in the 2015 accident year, reflecting that the inception-to-date case incurred remained zero for this claims-made segment in this year. The $ 8.2 million increase of prior accident year loss reserves related to Exited Lines primarily consisted of the following: • Property: A $ 12.4 millio n increase in total which is primarily due to case incurred emergence on a Property Brokerage claim in the 2018 accident year reflecting a higher estimated ultimate for Hurricane Michael. In addition, there was an increase in the 2016 and 2020 accident years which reflects higher than expected claims severity. The increases were partially offset by lower than expected severity in 2015, 2017 and 2019 accident years. • General Liability: A $ 2.6 million reduction primarily reflects lower than expected claims severity in the 2015 through 2017 and 2020 accident years, partially offset by an increase in the 2007, 2018 and 2019 accident year. • Reinsurance: A $ 1.6 million decrease was in the property lines and primarily in the 2011, 2015, 2017, 2018 and 2020 accident years, partially offset by increases in the 2010, 2012 and 2019 accident years. During 2020, the Company reduced its prior accident year loss reserves by $ 31.5 million, which consisted of a $ 23.5 million decrease related to Commercial Specialty, a $ 1.7 million decrease related to Reinsurance Operations, and a $ 6.3 million decrease related to Exited Lines. The $ 23.5 million reduction of prior accident year loss reserves related to Commercial Specialty primarily consisted of the following: • General Liability: A $ 20.4 million reduction in aggregate with $ 6.6 million of favorable development in the construction defect reserve category and $ 13.8 million of favorable development in the other general liability reserve categories. The reduction in the construction defect reserve category primarily recognizes lower than expected claims frequency and severity in the 2005 through 2009, 2012, 2015 and 2017 accident years, slightly offset by an increase in the 2016 accident year. For the other general liability reserve categories, lower than anticipated claims severity was the main driver of the favorable development primarily in the 2005 through 2015 accident years, partially offset by increases in the 2016 through 2019 accident years. • Professional Liability: A $ 1.8 million decrease mainly in the 2007 through 2010 and 2019 accident years recognizes lower than expected claims severity, partially offset by an increase in the 2006 accident year. • Commercial Auto Liability: A $ 1.0 million reduction primarily in the 2010 and 2012 through 2016 accident years recognizes lower than anticipated claims severity. • Property: A $ 0.1 million decrease primarily recognizes lower than expected claims severity in a few of the prior accident years. • Workers Compensation: A $ 0.2 million decrease primarily in loss adjustment expense reserves in the 2012 accident year and accident years prior to 2005. The $ 1.7 million reduction of prior accident year loss reserves related to Reinsurance Operations primarily consisted of the following: • Professional Lines: A $ 1.7 million decrease in the 2014 and 2015 accident years, reflecting that the inception-to-date case incurred remained zero for this claims-made segment in these years. The $ 6.3 million reduction of prior accident year loss reserves related to Exited Lines primarily consisted of the following: • Property: A $ 0.6 million decrease primarily reflects lower than anticipated claims severity in the 2015 through 2017 accident years and a reduction in the catastrophe reserve category in the 2017 accident year for subrogation recoveries from the California wildfires. This decrease is partially offset by a higher than expected claims severity in the 2018 and 2019 accident years. The bulk of the increase in the 2018 accident year reflects a higher estimated ultimate for Hurricane Michael; the increase in ultimate resulted from receiving additional information during the year for a Property Brokerage claim. • General Liability: A $ 2.4 million decrease primarily recognizes lower than expected claims severity mainly in the 2009 and 2015 through 2019 accident years, mostly offset by increases in the 2007 and 2013 accident years due to higher than anticipated claims severity. • Reinsurance: A $ 3.3 million decrease was primarily based on a review of the experience reported from cedants. There was a $ 2.9 million decrease in the property lines in the 2009 through 2018 accident years, partially offset by an increase in the 2019 accident year. In addition, there was a reduction of $ 0.4 million in the liability & workers compensation lines in the 2009 through 2012 accident years. Prior to 2001, the Company underwrote multi-peril business insuring general contractors, developers, and sub-contractors primarily involved in residential construction that has resulted in significant exposure to construction defect (“CD”) claims. The Company’s reserves for CD claims are established based upon management’s best estimate in consideration of known facts, existing case law, and generally accepted actuarial methodologies. However, due to the inherent uncertainty concerning this type of business, the ultimate exposure for these claims may vary significantly from the amounts currently recorded. As of December 31, 2022 and 2021 , gross reserves for CD claims were $ 34.8 million and $ 31.4 million, respectively, and net reserves for CD claims were $ 33.4 million and $ 30.2 million, respectively. The Company has exposure to asbestos and environmental (“A&E”) claims. The asbestos exposure primarily arises from the sale of product liability insurance, and the environmental exposure arises from the sale of general liability and commercial multi-peril insurance. In establishing the liability for unpaid losses and loss adjustment expenses related to A&E exposures, management considers facts currently known and the current state of the law and coverage litigation. Liabilities are recognized for known claims (including the cost of related litigation) when sufficient information has been developed to indicate the involvement of a specific insurance policy, and management can reasonably estimate its liability. In addition, liabilities have been established to cover additional exposures on both known and unasserted claims. Estimates of the liabilities are reviewed and updated regularly. Case law continues to evolve for such claims, and uncertainty exists about the outcome of coverage litigation and whether past claim experience will be representative of future claim experience. Included in net unpaid losses and loss adjustment expenses as of December 31, 2022, 2021, and 2020 were IBNR reserves of $ 18.9 million, $ 20.1 million, and $ 27.3 million, respectively, and case reserves of approximately $ 2.8 million, $ 1.9 million, and $ 1.4 million, respectively, for known A&E-related claims. The following table shows the Company’s gross reserves for A&E losses: Years Ended December 31, (Dollars in thousands) 2022 2021 2020 Gross reserve for A&E losses and loss adjustment expenses – beginning of period $ 39,153 $ 47,593 $ 48,825 Plus: Change in incurred losses and loss adjustment expenses 2,658 ( 7,500 ) ( 259 ) Less: Payments 4,669 940 973 Gross reserves for A&E losses and loss adjustment expenses – end of period $ 37,142 $ 39,153 $ 47,593 The following table shows the Company’s net reserves for A&E losses: Years Ended December 31, (Dollars in thousands) 2022 2021 2020 Net reserve for A&E losses and loss adjustment expenses – beginning of period $ 21,985 $ 28,679 $ 29,033 Plus: Change in incurred losses and loss adjustment expenses 1,962 ( 6,500 ) 1 Less: Payments 2,300 194 355 Net reserves for A&E losses and loss adjustment expenses – end of period $ 21,647 $ 21,985 $ 28,679 Establishing reserves for A&E and other mass tort claims involves more judgment than other types of claims due to factors including, but not limited to, inconsistent court decisions, an increase in bankruptcy filings as a result of asbestos-related liabilities, and judicial interpretations that often expand theories of recovery and broaden the scope of coverage. The insurance industry continues to receive a substantial number of asbestos-related bodily injury claims, with an increasing focus being directed toward other parties, including installers of products containing asbestos rather than against asbestos manufacturers. This shift has resulted in significant insurance coverage litigation implicating applicable coverage defenses or determinations, if any, including but not limited to, determinations as to whether or not an asbestos-related bodily injury claim is subject to aggregate limits of liability found in most comprehensive general liability policies. As of December 31, 2022, 2021, and 2020 , the survival ratio on a gross basis for the Company’s open A&E claims was 16.9 years, 33.3 years, and 35.5 years, respectively. As of December 31, 2022, 2021, and 2020 , the survival ratio on a net basis for the Company’s open A&E claims was 22.8 years, 63.5 years, and 59.5 years, respectively. The survival ratio, which is the ratio of gross or net reserves to the 3-year average of annual paid claims, is a financial measure that indicates how long the current amount of gross or net reserves are expected to last based on the current rate of paid claims. Line of Business Categories The following is information, presented by lines of business with similar characteristics including similar payout patterns, about incurred and paid claims development as of December 31, 2022, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported liabilities included within the net incurred claims amounts. The years included represent the number of years for which claims incurred typically remain outstanding but need not exceed 10 years including the most recent report period presented. The information about incurred and paid claims development for the years ended December 31, 2013 to 2021, is presented as required supplementary unaudited information. Commercial Specialty Property and Casualty Methodologies Commercial Specialty’s internal actuarial reserve reviews were completed for loss and allocated loss adjustment expenses (“ALAE”) separately for property excluding catastrophe experience, property catastrophes, and casualty reserve categories. The internal actuarial reserve reviews were completed with data through December, 2022. Actuarial methodologies, such as the Loss Development and Bornhuetter-Ferguson methods, were employed to develop estimates of ultimate loss & ALAE for most reserve categories. Additional actuarial methodologies were employed to develop estimates of ultimate loss & ALAE for mass tort and constructions defect reserve categories due to the unique characteristics of the exposures involved. Management’s ultimate selections considered the internal actuarial review and a third-party actuarial review completed during the fourth quarter of 2022. Case incurred is subtracted from the management selected ultimates to obtain the booked IBNR reserves. These methodologies are consistent with last year. Commercial Specialty’s cumulative claim frequency has been calculated at the claim level and includes claims closed without payment. Commercial Specialty – Property (Dollars in thousands) Incurred Claims and Allocated Claims Adjustment Expenses, For the Years Ended December 31, As of December 31, 2022 Accident 2020 2021 2022 IBNR (1) Cumulative Number (unaudited) (unaudited) 2020 $ 75,609 $ 78,760 $ 77,860 $ 2,003 4,598 2021 84,037 82,841 5,712 4,206 2022 82,018 14,533 3,234 Total $ 242,719 (1) Incurred-but-not-reported liabilities plus expected development on reported claims Commercial Specialty – Property (Dollars in thousands) Cumulative Paid Claims and Allocated Claims Adjustment Expenses, For the Years Ended December 31, Accident 2020 2021 2022 (unaudited) (unaudited) 2020 $ 47,486 $ 69,944 $ 73,640 2021 50,846 74,860 2022 49,744 Total 198,244 All outstanding liabilities before 2020, net of reinsurance 3,025 Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance $ 47,500 The following is required supplementary information about average historical claims duration as of December 31, 2022: Average Annual Percentage Payout of Incurred Claims by Age, Year 1 2 3 Commercial Specialty - Property 61.0 % 28.9 % 4.7 % Commercial Specialty – Casualty (Dollars in thousands) Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, As of December 31, 2022 Accident 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 IBNR (1) Cumulative (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2013 $ 63,931 $ 68,230 $ 68,081 $ 66,566 $ 65,193 $ 61,714 $ 58,961 $ 56,901 $ 56,786 $ 56,336 $ 1,226 2,597 2014 61,427 60,779 58,618 57,828 57,230 54,971 51,329 50,919 49,134 2,006 2,400 2015 57,710 57,088 58,384 58,993 60,231 56,498 56,279 55,322 2,652 2,162 2016 54,576 54,123 53,751 52,078 52,760 52,401 52,347 2,949 1,997 2017 54,654 54,978 53,876 54,704 56,273 57,369 4,535 1,915 2018 58,220 57,605 57,922 60,372 60,879 7,436 2,345 2019 69,145 69,114 73,968 76,844 9,924 2,695 2020 83,553 84,260 88,347 23,282 2,719 2021 112,124 113,382 55,202 3,689 2022 138,225 106,457 2,782 Total $ 748,185 (1) Incurred-but-not-reported liabilities plus expected development on reported claims Commercial Specialty – Casualty (Dollars in thousands) Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2013 $ 6,439 $ 17,969 $ 29,705 $ 38,641 $ 46,475 $ 51,167 $ 52,468 $ 53,194 $ 53,471 $ 53,525 2014 4,011 15,924 26,526 34,504 40,293 43,505 45,831 46,263 46,578 2015 3,355 14,865 25,559 36,357 43,116 46,272 48,524 50,169 2016 4,148 14,047 22,064 34,973 40,639 44,130 47,352 2017 4,996 12,879 23,326 33,511 39,926 46,169 2018 4,303 13,869 22,194 34,745 42,884 2019 5,222 14,017 30,439 48,285 2020 5,510 19,623 40,665 2021 7,238 24,414 2022 12,022 Total 412,063 All outstanding liabilities before 2013, net of reinsurance 44,506 Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance $ 380,628 The following is required supplementary information about average historical claims duration as of December 31, 2022: Average Annual Percentage Payout of Incurred Claims by Age, Year 1 2 3 4 5 6 7 8 9 10 Commercial Specialty - Casualty 7.7 % 17.4 % 19.3 % 19.7 % 12.2 % 7.6 % 4.3 % 1.7 % 0.6 % 0.1 % Reinsurance Lines Casualty Methodology Reinsurance Operations’ internal reserve reviews were completed for loss and allocated loss adjustment expenses (“ALAE”) by treaty. The current book of business is constituted of professional liability portfolios, retrocessions for casualty business, and primary reinsurance on a few smaller treaties. The reserve reviews were completed based on the latest data reported from the cedants which is typically on a quarter lag. Paid loss, ALAE and case reserves, shown in the reinsurance category tables below, which are originally based in a foreign currency, are remeasured in U.S. dollars based on the Foreign Exchange (“FX”) rate at the end of the period. Management’s ultimate selections considered the internal actuarial review and a third-party actuarial review completed during the fourth quarter of 2022. Case incurred is subtracted from the management selected ultimates to obtain the booked IBNR reserves. These methodologies are consistent with last year. The Company does not have direct access to claim frequency information underlying reinsurance contracts. As a result, the Company does not believe providing claim frequency information is practicable. Reinsurance Lines – Casualty (Dollars in thousands) Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance As of December 31, 2022 Accident 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 IBNR (1) Cumulative (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2013 $ 1,009 $ 1,009 $ 1,009 $ 850 $ 850 $ 850 $ — $ — $ — $ — $ — — 2014 1,987 1,987 1,954 1,954 1,954 590 — — — — — 2015 2,779 2,779 2,779 2,779 2,179 1,090 — — — — 2016 3,627 3,627 3,627 3,627 3,627 3,627 — — — 2017 4,358 4,358 4,358 4,358 4,358 4,358 4,356 — 2018 5,573 5,573 5,573 5,574 5,574 5,568 — 2019 13,686 13,686 13,685 14,080 11,092 — 2020 30,398 30,375 31,258 23,998 — 2021 49,177 50,122 42,927 — 2022 86,624 82,247 — Total $ 192,016 (1) Incurred-but-not-reported liabilities plus expected development on reported claims Reinsurance Lines – Casualty (Dollars in thousands) Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2013 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — 2014 — — — — — — — — — 2015 — — — — — — — — 2016 — — — — — — — 2017 — 2 2 2 2 2 2018 — — — 6 6 2019 27 801 1,014 1,925 2020 48 2,174 4,503 2021 1,593 3,986 2022 1,986 Total 12,408 All outstanding liabilities before 2013, net of reinsurance — Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance $ 179,608 The following is required supplementary information about average historical claims duration as of December 31, 2022: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited) (1) Year 1 2 3 4 5 6 7 8 9 10 Reinsurance Lines - Casualty 0.6 % 1.9 % 1.1 % 0.9 % — % — % — % — % — % — % (1) May not be indicative of future average annual percentage payout of incurred claims due to a change in mix of business Exited Lines Property and Casualty Methodologies Exited Lines’ internal actuarial reserve reviews were completed for loss and allocated loss adjustment expenses (“ALAE”) separately for property excluding catastrophe experience, property catastrophes, and casualty reserve categories. The internal actuarial reserve reviews were completed with data through December, 2022. Actuarial methodologies, such as the Loss Development and Bornhuetter-Ferguson methods, were employed to develop estimates of ultimate loss & ALAE. Management’s ultimate selections considered the internal actuarial review and a third-party actuarial review completed during the fourth quarter of 2022. Case incurred is subtracted from the management selected ultimates to obtain the booked IBNR reserves. These methodologies are consistent with last year. Exited Lines includes business acquired in the purchase of American Reliable, which occurred on January 1, 2015. The acquisition included the purchase of the business of the legal entity as well as additional books of business written by other Assurant entities. In addition, ceding arrangements subsequent to the date of the acquisition are not consistent with years prior to the acquisition. As a result, it is not practical, nor would it be consistent, to include information for years prior to 2015 in the development tables for Exited Lines. It also includes experience for reinsurance contracts which the Company does not have direct access to claim frequency information, so claim frequency information will not be provided for Exited Lines as it is not available for all the experience contained within this category. Exited Lines – Property (Dollars in thousands) Incurred Claims and Allocated Claims Adjustment Expenses, For the Years Ended December 31, As of December 31, 2022 Accident 2019 2020 2021 2022 IBNR (1) Cumulative Number (unaudited) (unaudited) (unaudited) 2019 $ 155,116 $ 159,713 $ 162,523 $ 160,865 $ 6,645 — 2020 155,747 159,718 161,351 9,558 — 2021 108,708 106,079 4,715 — 2022 42,818 4,017 — Total $ 471,113 (1) Incurred-but-not-reported liabilities plus expected development on reported claims Exited Lines – Property (Dollars in thousands) Cumulative Paid Claims and Allocated Claims Adjustment Expenses, For the Years Ended December 31, Accident 2019 2020 2021 2022 (unaudited) (unaudited) (unaudited) 2019 $ 99,554 $ 128,338 $ 140,463 $ 145,406 2020 121,430 143,332 148,159 2021 82,528 98,809 2022 34,533 Total 426,907 All outstanding liabilities before 2019, net of reinsurance 44,812 Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance $ 89,018 The following is required supplementary information about average historical claims duration as of December 31, 2022. Average Annual Percentage Payout of Incurred Claims by Age, Year 1 2 3 4 Exited Lines - Property 73.9 % 15.6 % 5.3 % 3.1 % Exited Lines – Casualty (Dollars in thousands) Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, As of December 31, 2022 Accident 2015 2016 2017 2018 2019 2020 2021 2022 IBNR (1) Cumulative (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2015 $ 18,612 $ 20,170 $ 21,243 $ 21,720 $ 21,133 $ 20,677 $ 20,045 $ 19,837 $ 864 — 2016 21,030 20,726 19,423 17,035 16,719 16,256 16,074 1,127 — 2017 19,683 18,730 17,624 17,056 15,516 15,114 1,518 — 2018 14,835 15,439 15,414 15,979 16,340 1,721 — 2019 13,574 13,518 13,870 13,613 2,934 — 2020 13,285 13,099 13,697 4,555 — 2021 12,376 12,160 8,115 — 2022 8,317 5,986 — Total $ 115,152 (1) Incurred-but-not-reported liabilities plus expected development on reported claims Exited Lines – Casualty (Dollars in thousands) Cumulative Paid Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident 2015 2016 2017 2018 2019 2020 2021 2022 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2015 $ 3,527 $ 8,605 $ 12,515 $ 15,575 $ 17,959 $ 18,584 $ 18,785 $ 18,806 2016 3,494 6,865 9,745 11,824 12,478 14,347 14,783 2017 2,051 4,635 8,406 11,585 12,021 12,413 2018 1,334 4,522 8,840 12,593 14,169 2019 1,975 5,011 7,900 9,820 2020 1,583 4,949 7,531 2021 1,628 3,125 2022 854 Total 81,501 All outstanding liabilities before 2015, net of reinsurance 4,683 Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance $ 38,334 The following is required supplementary information about average historical claims duration as of December 31, 2022: Average Annual Percentage Payout of Incurred Claims Year 1 2 3 4 5 6 7 8 Exited Lines - Casualty 13.9 % 20.3 % 21.5 % 17.3 % 7.2 % 5.8 % 1.9 % 0.1 % The reconciliation of the net incurred and paid claims development tables to the liability for unpaid losses and loss adjustment expenses in the consolidated balance sheets as of December 31, 2022 is as follows: Net outstanding liabilities Commercial Specialty – Property $ 47,500 Commercial Specialty – Casualty 380,628 Reinsurance Lines – Casualty 179,608 Exited Lines – Property 89,018 Exited Lines – Casualty 38,334 Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance 735,088 Reinsurance recoverable on unpaid claims Commercial Specialty – Property 5,951 Commercial Specialty – Casualty 45,273 Reinsurance Lines – Casualty — Exited Lines – Property 19,590 Exited Lines – Casualty ( 40 ) Total reinsurance recoverable on unpaid claims 70,774 Other outstanding liabilities Commercial Specialty Ceded Allowance 8,992 Unallocated claims adjustment expenses 14,818 Loss Clearing ( 918 ) Reinsurance Lines Unallocated claims adjustment expenses 595 Exited Lines Fronted business ceded to Assurant 2,189 Unallocated claims adjustment expenses 2,042 Other ( 1,176 ) Total other outstanding liabilities 26,542 Total gross liability for unpaid losses and loss adjustment expenses $ 832,404 |