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,
	2018			2017
Summary of claims and claim adjustment expense reserves
Balance, beginning of year	$	7,075		$	7,531
Less reinsurance recoverable on unpaid losses	327			1,184
Net balances at beginning of year	6,748			6,347
Net losses:
Provision for claims and claim adjustment expenses for claims arising in current year	9,185			10,786
Estimated claims and claim adjustment expenses for claims arising in prior years	(1,097		)	(751		)
Total increases	8,088			10,035
Claims and claim adjustment expense payments for claims arising in:
Current year	5,527			7,090
Prior years	2,567			2,006
Total payments	8,094			9,096
Net balance at end of period	6,742			7,286
Plus reinsurance recoverable on unpaid losses	185			526
Claims and claim adjustment expense reserves at end of period	$	6,927		$	7,812

The decline in claim and claim adjustment expense reserves before reinsurance recoverable is primarily due to the decrease in catastrophe losses during the period. The estimate for claims arising in prior years was reduced $1,097,000 in 2018 (reduced $751,000 in 2017) 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 $430,000 at March 31, 2018 ($367,000 at December 31, 2017). These claims are a component of policy and contract claims which totaled $913,000 at March 31, 2018 ($903,000 at December 31, 2017).