Our mortgage insurance provision for losses for  2011 also improved relative to 2010. This decrease was driven primarily  by a decline in new default notices and a relative improvement in the composition of the delinquent loan inventory (including  changes associated with the aging of delinquent loans and loans moving into pending claim status), which more than of fset the  decrease in the total number of defaulted loans that have cured (“cures”). In addition, existing defaults in  2010 were negatively  affected by increases in our severity assumptions, primarily related to pool insurance defaults. The default and claim cycle in the mortgage insurance business begins with our receipt of a default notice from the  servicer. For financial statement reporting and internal tracking purposes, we do not consider a loan to be in default until the  borrower has missed two monthly payments. Our first-lien primary default rate at  December 31, 2012 was 12.1%, compared to 15.2% at December 31, 2011. Our  primary default inventory comprised  93,169 loans at December 31, 2012, compared to 110,861 loans at December 31, 2011,  representing a 16.0% decrease. Our primary default inventory declined by an additional 2% in January  2013 from  December 31, 2012. The reduction in our defaulted inventory is the result of the total number of defaulted loans: (1) that have  cured; (2) for which claim payments have been made; or (3) that have resulted in net insurance rescissions and claim denials,  collectively exceeding the total number of new defaults on insured loans. Despite this positive trend, our overall primary default  rates continue to remain elevated compared to historical levels due to continued high unemployment and relative weakness in  the U.S. housing and mortgage credit markets. Overall, the underlying trend of high defaults continues to be driven primarily by  the poor performance of our 2005 through 2008 books of business. In addition, a slowdown in mortgage foreclosures, driven by  servicing delays and the effect of prolonged modification programs for delinquent loans, has contributed to the sustained high  level of our default inventory . This slowdown has resulted in more defaults remaining unresolved for a longer period of time  than has historically been the case. We believe that a return to sustained profitability in our mortgage insurance business is  dependent upon both a further reduction in the number of new defaults and an increase in the number of cures, particularly with  respect to loans that have been in default for more than twelve months.  We had a 22% total decrease in new primary defaults in  2012 compared to 2011, which compares to an 18% decrease in new primary defaults in  2011 and a 30% decrease in 2010.  Although significant uncertainty remains, for  2013, we currently expect a further decline in incurred losses driven primarily by  an expected decrease in new defaults of approximately 24% as compared to 2012. With continuing declines in home values in certain markets, persistently high unemployment and delays by servicers in  either modifying loans or foreclosing on properties, the time it has taken to cure or otherwise resolve a delinquent loan has been  prolonged. Consequently, in recent years, our default inventory has experienced an increase in its weighted average age, and  because we apply higher estimated “default to claim rates” (weighted average rate at which defaulted loans are expected to  move to claim) on our more aged delinquent loans, this has resulted in additional incurred losses related to this ef fect. Our  aggregate weighted average estimated default to claim rate (net of estimated insurance rescissions and claim denials) was  approximately 47% at December 31, 2012, compared to 43% at December 31, 2011 and 40% at December 31, 2010. The following tables show additional information about our primary loans in default as of the dates indicated: December 31, 2012 Projected Default to Claim Rate Gross (1) Net (2) Cure % During the Quarter Reserve for Losses % of Reserve ($ in thousands) # % % % % $ % Missed payments: Three payments or less. . . . . . . 18,007 19.3% 25% 23% 25.1% $ 187,454 7.8% Four to eleven payments . . . . . 20,080 21.6 48 44 12.1 435,895 18.2 Twelve payments or more. . . . 37,457 40.2 57 47 4.6 991,159 41.4 Pending claims. . . . . . . . . . . . . 17,625 18.9 100 86 0.5 781,666 32.6 Total . . . . . . . . . . . . . . . . . . . . 93,169 100.0% 57% 49% 2,396,174 100.0% IBNR . . . . . . . . . . . . . . . . . . . . 289,032 LAE and Other. . . . . . . . . . . . . 64,252 Total primary reserves. . . . . . $2,749,458 106