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Loss and loss adjustment expense $ 1,290,030 $ 77,314 $ 1,367,344 $ 1,218,285 $ 86,209 $ 1,304,494
* Accident-year incurred losses and loss adjustment expenses
In addition, a number of companies also establish allocated loss adjustment expense case reserves to reflect the anticipated cost of handling.
(3.) The value of the homes at different underwriting levels also would be different but the current version of this game treats all homes as of equal value regardless of the underwriting level and holds the loss adjustment expense per home constant.
This benefit is included within loss and loss adjustment expenses.
OPERATING RESULTS FOR 2014 AND 2013 ($ Millions) FIRST QUARTER 2014 2013 Net Written Premiums 121,421 117,201 Percent Change (%) 3.6 4.3 Net Earned Premiums 117,880 112,971 Percent Change (%) 4.3 4.6 Incurred Losses & Loss Adjustment Expenses 80,789 74,376 Percent Change (%) 8.6 -1.5 Statutory Underwriting Gains (Losses) 2,908 5,076 Policyholders' Dividends 673 0.555 Net Underwriting Gains (Losses) 2,235 4,521 Pretax Operating Income 13,654 15,794 Net Investment Income Earned 11,180 11,413 Net Realized Capital Gains (Losses) 2,933 1,387 Net Investment Gains 14,113 12,800 Net Income (Loss) After Taxes 13,754 14,327 Percent Change (%) (4.0) 38.7 Surplus (Consolidated) 662,013 609,805 Loss & Loss Adjustment Expense Reserves 574,648 576,475 Combined Ratio, Post-Dividends (%) 97.3 94.9
Demotech further stated that going forward insurers will need to strengthen their loss and loss adjustment expense reserves to deal with the "difficult operational environment associated with ( assignment of benefits [AOB] and other judicial precedents that expanded insurer liability..."
The swing to net gains on underwriting is attributable to premium growth and a drop in net losses and loss adjustment expenses (LLAE).
Similarly, the ratio of loss and loss adjustment expense reserves to surplus as of September 30 this year was 0.99--far below the 1.41 average LLAE-reserves-to-surplus ratio for the past 53 years," said Murray.
Clients also gain the ability to better manage and track indemnity costs while reducing loss adjustment expense.
If dividends to policyholders are 5 percent and underwriting expenses can be reduced slightly to 25 percent, a 72 percent loss and loss adjustment expense (LAE) ratio is a reasonable target (102% - 5% - 25% = 72%).
Also, under the terms of the agreement, Ariel has agreed to provide First Mercury with full protection related to the runoff of Valiant's net loss and loss adjustment expense reserves and unearned premium reserves reflected on the closing date balance sheet.