Annual report pursuant to Section 13 and 15(d)

Estimate of Claims Losses

v3.22.4
Estimate of Claims Losses
 12 Months Ended
Dec. 31, 2022
Insurance [Abstract]  
Estimate of Claims Losses
23. Estimate of Claims Losses
The Company is occasionally named as a defendant in claims concerning title insurance policies, closing protection letters, and alleged errors or omissions pertaining to the issuance of title policies or the performance of escrow services. The Company assesses pending and threatened claims to determine whether losses are probable and reasonably estimable in accordance with ASC 944, Financial Services - Insurance and ASC 450, Contingencies. To the extent losses are deemed to meet the probable and estimable criteria, the Company establishes an accrual for those losses based on historical experience and analysis of specific claim attributes, which is included in estimate of claim losses within payables and other liabilities in the Consolidated Statements of Financial Condition.
The activity related to the outstanding estimate of claim losses consisted of the following (in thousands):
December 31, 2022 December 31, 2021
Beginning balance $ 14,993  $ 8,609 
Provision charged to income from operations 3,351  7,043 
Claim loss payments (1,079) (659)
Reduction from acquisition divestiture (458) — 
Ending balance $ 16,807  $ 14,993 
Activity in the liability for loss and loss adjustment expense of the Company's insurance subsidiary, which is included in estimate of claim losses within payables and other liabilities in the Consolidated Statements of Financial Condition, consisted of the following (in thousands):
December 31, 2022 December 31, 2021
Beginning balance, net of reinsurance recoverable of $99 as of January 1, 2022 and 2021
 $ 12,182  $ 6,334 
Incurred related to:
Current year 2,316  6,203 
Prior years 580  43 
Total incurred 2,896  6,246 
Paid related to:
Current year 165  307
Prior years, net of reinsurance and other receivables of $99 as of December 31, 2022 and 2021
 676  91
Total paid 841  398 
Ending balance, net of reinsurance recoverable of $99 as of December 31, 2022 and 2021
 $ 14,237  $ 12,182 

A known claim reserve is an amount estimated by the Company to be sufficient to cover all unpaid losses, claims, and allocated loss adjustment expenses arising under title insurance policies for which the Company may be liable, and for which they have discovered or received notice by or on behalf of the insured or escrow or security depositor.
The Company's insurance subsidiary has paid cumulative gross loss and loss adjustment expenses of $9.2 million, $8.1 million, and $7.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.
The Company's insurance subsidiary has recovered $0.2 million for the years ended December 31, 2022, 2021 and 2020. No unsecured aggregate recoverable for losses, paid and unpaid, loss adjustment expenses, and unearned premiums existed as of December 31, 2022 or December 31, 2021.
The effects of reinsurance on premiums written by the Company's insurance subsidiary consisted of the following (in thousands):
December 31, 2022 December 31, 2021
Title premiums written:
Direct $ 93,902  $ 143,668 
Ceded (1,451) (1,691)
Net title premiums written $ 92,451  $ 141,977