POLICY AND CLAIM RESERVES

The Company regularly updates its reserve estimates as new information becomes available and events occur that may impact the resolution of unsettled claims. Reserve estimation can be an inherently uncertain process and reserves estimates can be revised up or down depending on changes in circumstances. Changes in prior years' reserve estimates are reflected in the results of operations in the year such changes are determined.

The following table is a reconciliation of beginning and ending property and casualty reserve balances for claims and claim adjustment expense (dollars in thousands):



	Three months ended March 31,
	2017			2016
Summary of claims and claim adjustment expense reserves
Balance, beginning of year	$	7,531		$	9,645
Less reinsurance recoverable on unpaid losses	1,184			1,380
Net balances at beginning of year	6,347			8,265
Net losses:
Provision for claims and claim adjustment expenses for claims arising in current year	10,786			8,877
Estimated claims and claim adjustment expenses for claims arising in prior years	(751		)	(839		)
Total increases	10,035			8,038
Claims and claim adjustment expense payments for claims arising in:
Current year	7,090			5,785
Prior years	2,006			3,546
Total payments	9,096			9,331
Net balance at end of year	7,286			6,972
Plus reinsurance recoverable on unpaid losses	526			1,272
Claims and claim adjustment expense reserves at end of year	$	7,812		$	8,244

The decrease in claim and claim adjustment expense reserves before reinsurance recoverable is primarily due to the settlement final outstanding ocean marine claims that were settled in the second quarter of 2016. The estimate for claims arising in prior years was reduced $751,000 in 2017 (reduced $839,000 in 2016) due to favorable loss development during the year on claims arising in prior years.

Accident and Health Claim Reserves

The Company, through its life insurance subsidiary, underwrites a limited number of short duration accident and health contracts. These claims are typically settled in three years or less and the reserve for unpaid claims totaled $350,000 at March 31, 2017 ($391,000 at December 31, 2016). These claims are a component of policy and contract claims which totaled $914,000 at March 31, 2017 ($1,008,000 at December 31, 2016).