The Company determines its reserve for unpaid losses on an individual case basis for all incidents reported. The liability also includes amounts for incurred but not reported ("IBNR") claims as of the balance sheet date.

The table below shows the analysis of the Company's reserve for unpaid losses for the six months ended June 30, 2026 and 2025:


	2026			2025
Balance at January 1	$	165,701		$	322,087
Less: reinsurance recoverable on unpaid losses		116,772			249,276
Net balance at January 1		48,929			72,811

Incurred related to:
Current year		29,975			30,398
Prior years		(899	)		(3,469	)
Total incurred		29,076			26,929
Paid related to:
Current year		20,295			22,781
Prior years		10,907			14,652
Total paid		31,202			37,433

Net balance at June 30		46,803			62,307
Plus: reinsurance recoverable on unpaid losses		72,117			156,935
Balance at June 30		118,920			219,242

Composition of reserve for unpaid losses and LAE:
Case reserves		13,229			37,258
IBNR reserves		105,691			181,984
Balance at June 30	$	118,920		$	219,242

Based upon the Company's internal analysis and the Company's review of the annual statement of actuarial opinion provided by its actuarial consultants at December 31, 2025, the Company believes that the reserve for unpaid losses reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

As reflected in the table above, the Company had favorable development in the first six months of 2026 and 2025 related to prior year losses. This development came as a result of re-estimating ultimate losses in 2026 and 2025 based on our initial reserves being higher than ultimate settlements. Current year loss payments made by the Company during the six months ended June 30, 2026 have decreased compared to the same period in 2025. Case and IBNR reserves on unpaid losses decreased when compared to the prior period as a result of the continued settlement of claims and no new catastrophe events. Reinsurance recoverable on unpaid losses decreased in line with this decrease in case and IBNR reserves.