NOTE 5. RESERVES FOR LOSSES AND LAE

We establish reserves for the estimated unpaid ultimate liability for losses and LAE under the terms of our policies and agreements. The determination of reserves for losses and LAE is partially dependent upon the receipt of information from agents and brokers. Reserves include estimates for both claims that have been reported and for IBNR, and include estimates of expenses associated with processing and settling these claims. Reserves are recorded in Reserves for losses and LAE in the Consolidated Balance Sheets. Our estimates and judgments may be revised as additional experience and other data become available and are reviewed, as new or improved methodologies are developed, or as laws change. Frequency/severity analyses, are also performed for certain books of business. To the extent that reserves are found deficient or redundant, a strengthening or release is recognized as a charge or credit to earnings.

The following table summarizes our Company’s Reserves for losses and LAE activity for the years ended December 31, 2015, 2014 and 2013:

	Years Ended December 31,
amounts in thousands	2015			2014			2013
Net reserves for losses and LAE at beginning of year	$	1,308,136		$	1,222,633		$	1,216,909
Provision for losses and LAE for claims occurring in the current year		637,267			601,041			520,227
Increase (decrease) in estimated losses and LAE for claims occurring in prior years		(64,669	)		(55,812	)		(1,266	)
Incurred losses and LAE	$	572,598		$	545,229		$	518,961
Losses and LAE paid for claims occurring during:
Current year		(159,802	)		(158,806	)		(147,864	)
Prior years		(320,863	)		(295,527	)		(365,479	)
Losses and LAE payments	$	(480,665	)	$	(454,333	)	$	(513,343	)
Foreign Currency Adjustment		(6,943	)		(5,393	)		106
Net reserves for losses and LAE at end of year		1,393,126			1,308,136			1,222,633
Reinsurance recoverables on unpaid losses and LAE		809,518			851,498			822,438
Gross reserves for losses and LAE at end of year	$	2,202,644		$	2,159,634		$	2,045,071

The reporting and operating segments breakdowns of prior period net reserve strengthening (releases) for the years ended December 31, 2015, 2014 and 2013 are as follows:

	Years Ended December 31,
amounts in thousands	2015			2014			2013
U.S. Insurance
Marine	$	(24,825	)	$	(29,047	)	$	(13,679	)
P&C		(706	)		17,081			12,938
Professional Liability		(3,788	)		(3,454	)		11,777
Total	$	(29,319	)	$	(15,420	)	$	11,036

Int'l Insurance
Marine		(21,914	)		(31,677	)		(6,361	)
P&C		(8,458	)		(3,829	)		(22,263	)
Professional Liability		4,156			(2,746	)		1,289
Total	$	(26,216	)	$	(38,252	)	$	(27,335	)

GlobalRe	$	(9,134	)	$	(2,140	)	$	15,033

Total strengthening (releases)	$	(64,669	)	$	(55,812	)	$	(1,266	)

The following is a discussion of the relevant factors related to the prior period net reserve releases of $64.7 million recorded for the year ended December 31, 2015:

U.S. Insurance reporting segment recorded prior period net reserve releases of $29.3 million. The drivers are as follows:

U.S. Marine operating segment recorded prior period net reserve releases of $24.8 million driven by favorable claims development in the Marine Liability, Inland Marine and Cargo products.

U.S. P&C operating segment recorded prior period net reserve releases of $0.7 million driven by ongoing favorable performance within our Excess Casualty, Environmental and Other P&C divisions, mostly offset by large loss activity within our Primary Casualty division.

U.S. Professional Liability operating segment recorded prior period net reserve releases of $3.8 million driven by favorable emergence in our E&O division, partially offset by unfavorable development in several large D&O claims

Int’l Insurance reporting segment recorded prior period net reserve releases of $26.2 million. The drivers are as follows:

Int’l Marine operating segment recorded prior period net reserve releases of $21.9 million driven primarily due to favorable claims development on the Marine Liability, Protection and Indemnity and Specie products.

Int’l P&C operating segment recorded prior period net reserve releases of $8.5 million due to favorable claims development on the Offshore Energy product within the Energy & Engineering division.

Int’l Professional Liability operating segment recorded prior period net reserve strengthening of $4.2 million driven by adverse development in our D&O division related to two large losses, partially offset by favorable claims development on our E&O division.

GlobalRe reporting segment recorded prior period net reserve releases of $9.1 million primarily driven by favorable loss development in our Marine, P&C and A&H products.

The following is a discussion of relevant factors related to the prior period net reserve releases of $55.8 million recorded for the year ended December 31, 2014:

U.S. Insurance reporting segment recorded prior period net reserve releases of $15.4 million. The drivers of these prior period net reserve releases by operating segment are as follows.

U.S. Marine operating segment recorded prior period net reserve releases of $29.0 million driven by favorable claims development on our Marine Liability, Craft, Fishing Vessels, Inland Marine, Hull and Cargo products.

U.S. P&C operating segment recorded prior period net reserve strengthening of $17.1 million driven by unfavorable activity on pre-2010 California construction defect liability claims in our Primary Casualty division, partially offset by reserve releases due to favorable loss emergence from our Excess Casualty division.

U.S. Professional Liability operating segment recorded prior period net reserve releases of $3.5 million driven primarily by favorable loss emergence from our D&O division due to a cash settlement of a contract dispute with a former third party administrator.

Int’l Insurance reporting segment recorded prior period net reserve releases of $38.3 million. The drivers are as follows:

Int’l Marine operating segment recorded prior period net reserve releases of $31.7 million driven by favorable loss emergence across various products.

Int’l P&C operating segment recorded prior period net reserve releases of $3.8 million driven primarily by favorable claims development in our Energy & Engineering division.

Int’l Professional Liability operating segment recorded prior period net reserve releases of $2.7 million due to favorable loss emergence in our E&O and D&O divisions.

GlobalRe reporting segment recorded prior period net reserve releases of $2.1 million driven by favorable claim development in our Marine product.

The following is a discussion of relevant factors related to the prior period net reserve releases of $1.3 million recorded for the year ended December 31, 2013:

U.S. Insurance reporting segment recorded prior period net reserve strengthening of $11.0 million. The drivers are as follows:

U.S. Marine operating segment recorded prior period net reserve releases of $13.7 million driven by favorable claims development on our Marine Liability product for underwriting years (“UWYs”) 2012 and prior.

U.S. P&C operating segment recorded prior period net reserve strengthening of $12.9 million primarily from our Primary Casualty division due to unfavorable claims activity.

U.S. Professional Liability operating segment recorded prior period net reserve strengthening of $11.8 million from our D&O division related to specific large claims for UWYs 2010 and prior, and additional reserve strengthening in our E&O division related to specific large claims from our Miscellaneous Professional Liability and Other E&O products from UWYs 2011 and prior.

Int’l Insurance reporting segment recorded prior period net reserve releases of $27.3 million. The drivers are as follows:

Int’l Marine operating segment recorded prior period net reserve releases of $6.4 million driven primarily by favorable loss emergence in International Marine Liability.

Int’l P&C operating segment recorded prior period net reserve releases of $22.3 million driven primarily by favorable emergence on our Marine Liability product.

Int’l Professional Liability operating segment recorded prior period net reserve strengthening of $1.3 million from our E&O division, partially offset by reserve releases related to favorable activity in our D&O division.

GlobalRe reporting segment recorded prior period net reserve strengthening of $15.0 million primarily due to worse than expected results within our A&H product in connection with UWYs 2012 and 2011 and to a lesser extent unfavorable loss emergence in our Marine product.