4. RESERVES FOR LOSSES AND LAE

Activity in the reserve for losses and LAE is summarized for the periods indicated:


	Three Months Ended			Twelve Months Ended
	March 31,			December 31,
(Dollars in thousands)	2019			2018
Gross reserves at January 1	$	10,167,018		$	9,343,028
Less reinsurance recoverables		(4,697,543	)		(5,727,268	)
Net reserves at January 1		5,469,475			3,615,760

Incurred related to:
Current year		788,837			4,252,220
Prior years		7,259			558,798
Total incurred losses and LAE		796,096			4,811,018

Paid related to:
Current year		100,676			1,524,635
Prior years		607,365			1,408,256
Total paid losses and LAE		708,041			2,932,891

Foreign exchange/translation adjustment		7,368			(24,412	)

Net reserves at December 31		5,564,898			5,469,475
Plus reinsurance recoverables		4,608,571			4,697,543
Gross reserves at December 31	$	10,173,469		$	10,167,018

(Some amounts may not reconcile due to rounding.)

Incurred prior years losses increased by $7,259 thousand for the three months ended March 31, 2019 and by $558,798 thousand for the twelve months ended December 31, 2018, respectively. The increase for 2018 was mainly due to $553,036 thousand of adverse development on prior years catastrophe losses, primarily related to Hurricanes Harvey, Irma and Maria, as well as the 2017 California wildfires. The increase in loss estimates for Hurricanes Harvey, Irma and Maria was mostly driven by re-opened claims, loss inflation from higher than expected loss adjustment expenses and in particular, their impact on aggregate covers.