(4) Loss and Loss Expense Reserves:

Activity in the reserves for losses and loss expenses for the nine months ended September 30, 2019 and 2018 is summarized as follows. All amounts are shown net of reinsurance, unless otherwise indicated.

	Nine Months Ended
	September 30
	2019			2018
Reserves, gross of reinsurance recoverable, at the beginning of the year	$	865,339		$	680,274
Reinsurance recoverable on unpaid losses at the beginning of the year		375,935			308,143
Reserves at the beginning of the year		489,404			372,131

Provision for losses and loss expenses:
Claims occurring during the current period		263,925			229,644
Claims occurring during prior periods		(1,589	)		14,683
Total incurred		262,336			244,327

Loss and loss expense payments:
Claims occurring during the current period		53,836			49,510
Claims occurring during prior periods		133,196			123,167
Total paid		187,032			172,677
Reserves at the end of the period		564,708			443,781

Reinsurance recoverable on unpaid losses at the end of the period		395,987			334,056
Reserves, gross of reinsurance recoverable, at the end of the period	$	960,695		$	777,837

The $1,589 prior accident year favorable development during the nine months ended September 30, 2019 was primarily due to favorable loss development in workers' compensation and independent contractor coverages. This savings compares to a prior accident year deficiency of $14,683 for the nine months ended September 30, 2018, which related to unfavorable loss development in commercial automobile coverages. 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.