(4) Loss and Loss Expense Reserves:

Activity in the reserves for losses and loss expenses for the nine months ended September 30, 2018 and 2017 is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated.

	2018		2017
Reserves, gross of reinsurance recoverable, at the beginning of the year	$	680,274	$	576,330
Reinsurance recoverable on unpaid losses at the beginning of the year		308,143		251,563
Reserves at the beginning of the year		372,131		324,767

Provision for losses and loss expenses:
Claims occurring during the current period		229,644		164,546
Claims occurring during prior periods		14,683		16,480
Total incurred		244,327		181,026

Loss and loss expense payments:
Claims occurring during the current period		49,510		41,616
Claims occurring during prior periods		123,167		109,616
Total paid		172,677		151,232
Reserves at the end of the period		443,781		354,561

Reinsurance recoverable on unpaid losses at the end of the period		334,056		301,445
Reserves, gross of reinsurance recoverable, at the end of the period	$	777,837	$	656,006

The table above shows a roll-forward of loss and loss expense reserves from the prior year end to the current balance sheet date with comparable prior year information. Losses incurred from claims occurring during prior years reflect the development from prior accident years, composed of individual claim savings and deficiencies which, in the aggregate, have resulted from the settlement of claims at amounts higher or lower than previously reserved and from changes in estimates of losses incurred but not reported.

The $14,683 prior accident year deficiency that developed during the nine months ended September 30, 2018 was largely due to unfavorable loss development in commercial automobile coverages. This unfavorable loss development was the result of increased claim severity due to a more challenging litigation environment, as well as an increase in the time to settle claims. This 2018 deficiency compares to a deficiency of $16,480 for the nine months ended September 30, 2017 also related to unfavorable loss development from commercial automobile coverages, particularly from infrequent, but severe, transportation loss events that occurred primarily during the first six months of 2017.