We record reserves for estimated losses under insurance policies that we write and for loss adjustment expenses related to the investigation and settlement of policy claims. Our reserves for loss and loss adjustment expenses represent the estimated cost of all reported and unreported loss and loss adjustment expenses incurred and unpaid as of a given point in time. The reserves for loss and loss adjustment expenses are estimated using individual case-basis valuations, statistical analyses and estimates based upon experience for unreported claims and their associated loss and loss adjustment expenses. Such estimates may be more or less than the amounts ultimately paid when the claims are settled. The estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in these estimates, management believes that the reserves for loss and loss adjustment expenses are adequate. The estimates are continually reviewed internally and periodically evaluated with our independent actuary. Adjustments are made as experience develops and new information becomes known. Any such adjustments are included in income from current operations. See Note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information regarding the Company’s loss and loss adjustment expense development.

The following table provides the Company’s liability for unpaid loss and loss adjustment expenses, net of related amounts recoverable from reinsurers, for the nine months ended September 30, 2019 and 2018:

	Nine Months Ended September 30,
	2019			2018
	(in thousands)
Balance, beginning of period	$	798,409		$	771,845
Less amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses		107,216			84,889
Net balance, beginning of period		691,193			686,956
Add incurred related to:
Current accident year		181,693			186,964
Prior accident years		(38,886	)		(34,128	)
Total incurred		142,807			152,836
Less paid related to:
Current accident year		35,512			37,901
Prior accident years		105,590			115,194
Total paid		141,102			153,095
Net balance, end of period		692,898			686,697
Add amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses		97,914			104,432
Balance, end of period	$	790,812		$	791,129

The foregoing reconciliation reflects favorable development of the net reserves at September 30, 2019 and September 30, 2018. The favorable development reduced loss and loss adjustment expenses incurred by $38.9 million and $34.1 million in 2019 and 2018, respectively. The revisions to the Company’s reserves reflect new information gained by claims adjusters in the normal course of adjusting claims and is reflected in the financial statements when the information becomes available. It is typical for more serious claims to take several years or longer to settle and the Company continually revises estimates as more information about claimants’ medical conditions and potential disability becomes known and the claims get closer to being settled. Multiple factors can cause loss development both unfavorable and favorable. The favorable loss development we experienced across accident years was largely due to favorable case reserve development from closed claims and claims where the worker had reached maximum medical improvement.