Losses And Loss Adjustment Expenses

12 Months Ended

Dec. 31, 2015

The following table presents the activity in the reserves for losses and loss adjustment expenses:



	Year Ended December 31,
	2015			2014			2013
	(Amounts in thousands)
Gross reserves at January 1	$	1,091,797		$	1,038,984		$	1,036,123
Less reinsurance recoverable	(14,484		)	(13,927		)	(12,155		)
Net reserves at January 1	1,077,313			1,025,057			1,023,968
Acquisition of WAIC reserves	18,676			—			—
Incurred losses and loss adjustment expenses related to:
Current year	2,132,837			1,989,315			1,959,730
Prior years	12,658			(3,193		)	2,960
Total incurred losses and loss adjustment expenses	2,145,495			1,986,122			1,962,690
Loss and loss adjustment expense payments related to:
Current year	1,455,245			1,347,967			1,354,074
Prior years	654,097			585,899			607,527
Total payments	2,109,342			1,933,866			1,961,601
Net reserves at December 31	1,132,142			1,077,313			1,025,057
Reinsurance recoverable	14,546			14,484			13,927
Gross reserves at December 31	$	1,146,688		$	1,091,797		$	1,038,984

The increase in the provision for insured events of prior years in 2015 of approximately $12.7 million primarily resulted from the California homeowners and automobile lines of business outside of California, which was partially offset by favorable development in the California automobile line of business.

The decrease in the provision for insured events of prior years in 2014 of approximately $3.2 million primarily resulted from lower than expected loss severity on California personal automobile lines of insurance business partially offset by adverse development in other states.

The increase in the provision for insured events of prior years in 2013 of approximately $3.0 million primarily resulted from Florida claims that were re-opened from prior years due to a state supreme court ruling that was adverse to the insurance industry.

The Company experienced estimated pre-tax catastrophe losses and loss adjustment expenses from severe weather events of $19 million, $11 million, and $17 million in 2015, 2014, and 2013, respectively. The losses in 2015 were primarily the result of severe storms outside of California, and rainstorm and wildfire losses in California. The losses in 2014 were primarily related to winter freeze events on the East Coast and severe rainstorms in California. The losses in 2013 were primarily due to tornadoes in Oklahoma and severe storms in the Midwest and the Southeast regions during the second quarter.