The Company regularly updates its reserve estimates as new information becomes available and further events occur which may impact the resolution of unsettled claims. Reserve adjustments are reflected in results of operations as adjustments to losses and loss adjustment expenses (“LAE”). Often these adjustments are recognized in periods subsequent to the period in which the underlying policy was written, and loss event occurred. These types of subsequent adjustments are described as “prior years’ loss reserves.” Such development can be either favorable or unfavorable to the Company’s financial results and may vary by line of business. In this section, all amounts presented include catastrophe losses and LAE, unless otherwise indicated.

The table below provides a reconciliation of the gross beginning and ending reserve for unpaid losses and loss adjustment expenses.


	Nine Months Ended
	September 30,
(in millions)	2022			2021
Gross reserve for losses and LAE, beginning of period	$	6,447.6		$	6,024.0
Reinsurance recoverable on unpaid losses		1,693.8			1,641.6
Net reserve for losses and LAE, beginning of period		4,753.8			4,382.4
Net incurred losses and LAE in respect of losses occurring in:
Current year		2,603.8			2,427.1
Prior years		(31.2	)		(56.7	)
Total incurred losses and LAE		2,572.6			2,370.4
Net payments of losses and LAE in respect of losses occurring in:
Current year		1,041.3			981.0
Prior years		1,226.2			1,036.5
Total payments		2,267.5			2,017.5
Net reserve for losses and LAE, end of period		5,058.9			4,735.3
Reinsurance recoverable on unpaid losses		1,715.1			1,804.8
Gross reserve for losses and LAE, end of period	$	6,774.0		$	6,540.1

As a result of continuing trends in the Company’s business, reserves, including catastrophes, have been re-estimated for all prior accident years and were decreased by $31.2 million and $56.7 million in 2022 and 2021, respectively.

For the nine months ended September 30, 2022, net favorable loss and LAE development was $31.2 million, primarily as a result of favorable Specialty development of $24.2 million and favorable Core Commercial development of $20.2 million, partially offset by unfavorable Personal Lines development of $13.2 million. Specialty favorable development was primarily due to lower than expected losses of $13.2 million in the Professional and Executive lines, lower than expected losses of $11.5 million in the surety line, and lower than expected losses of $10.2 million in the marine line, partially offset by higher than expected losses of $10.5 million in the Specialty P&C lines. Core Commercial favorable development was primarily due to lower than expected losses of $21.0 million in the workers' compensation line primarily in accident years 2013 through 2018 and 2020, and lower than expected losses of $9.9 million in the commercial multiple peril line, partially offset by higher than expected losses of $11.5 million in the commercial automobile line. Personal Lines unfavorable development was due to higher than expected losses of $19.4 million, in the homeowners line, primarily due to higher severity and longer cycle times in repair activity, primarily related to claims incurred in the fourth quarter of 2021.

For the nine months ended September 30, 2021, net favorable loss and LAE development was $56.7 million, as a result of favorable Personal Lines development of $23.1 million, favorable Core Commercial development of $20.3 million, and favorable Specialty development of $14.3 million. Personal Lines favorable development was primarily due to lower than expected losses of $20.1 million in the personal automobile line, driven by lower bodily injury and personal injury protection losses, primarily in accident year 2020. Core Commercial favorable development was primarily due to lower than expected losses of $12.8 million in the workers' compensation line primarily in accident years 2014 through 2019, and lower than expected losses of $11.8 million in the commercial multiple peril line. Specialty favorable development was primarily due to lower than expected losses of $13.8 million in the marine line.