Loss and Loss Adjustment Expense Reserves

The following table presents the activity in loss and loss adjustment expense reserves:



	Nine Months Ended September 30,
	2018			2017

	(Amounts in thousands)
Gross reserves at January 1	$	1,510,613		$	1,290,248
Less reinsurance recoverables on unpaid losses	(64,001		)	(13,161		)
Net reserves at January 1	1,446,612			1,277,087
Incurred losses and loss adjustment expenses related to:
Current year	1,781,452			1,772,203
Prior years	70,399			18,347
Total incurred losses and loss adjustment expenses	1,851,851			1,790,550
Loss and loss adjustment expense payments related to:
Current year	1,072,758			1,099,656
Prior years	695,678			606,615
Total payments	1,768,436			1,706,271
Net reserves at September 30	1,530,027			1,361,366
Reinsurance recoverables on unpaid losses	50,027			10,798
Gross reserves at September 30	$	1,580,054		$	1,372,164

The increase in the provision for insured events of prior years in 2018 of approximately $70.4 million was primarily attributable to higher than estimated California automobile losses resulting from severity in excess of expectations for bodily injury claims as well as higher than estimated defense and cost containment expenses in the California automobile line of insurance business.

The increase in the provision for insured events of prior years in 2017 of approximately $18.3 million was primarily attributable to higher than estimated California automobile and property losses.

For the nine months ended September 30, 2018 and 2017, the Company recorded catastrophe losses of approximately $34 million ($24 million of net losses after reinsurance benefits) and $59 million, respectively. There were no reinsurance benefits used for catastrophe losses for the nine months ended September 30, 2017. The majority of the 2018 catastrophe losses were caused by the Carr Wildfire in Northern California, which resulted in $21 million of gross losses ($10 million of net losses after reinsurance benefits). Weather-related catastrophes across several states made up the remainder of the 2018 catastrophe losses. The 2017 catastrophe losses were primarily due to severe rainstorms in California, the impact of Hurricane Harvey in Texas and Hurricane Irma in Florida and Georgia, and storms and tornadoes in Oklahoma and Texas.