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.


	Three Months Ended
	March 31,
(in millions)	2023			2022
Gross reserve for losses and LAE, beginning of period	$	7,012.6		$	6,447.6
Reinsurance recoverable on unpaid losses		1,748.6			1,693.8
Net reserve for losses and LAE, beginning of period		5,264.0			4,753.8
Net incurred losses and LAE in respect of losses occurring in:
Current year		1,020.4			793.5
Prior years		(3.0	)		(6.0	)
Total incurred losses and LAE		1,017.4			787.5
Net payments of losses and LAE in respect of losses occurring in:
Current year		222.0			191.1
Prior years		667.3			534.2
Total payments		889.3			725.3
Net reserve for losses and LAE, end of period		5,392.1			4,816.0
Reinsurance recoverable on unpaid losses		1,751.3			1,696.2
Gross reserve for losses and LAE, end of period	$	7,143.4		$	6,512.2

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 $3.0 million and $6.0 million in 2023 and 2022, respectively.

For the three months ended March 31, 2023, net favorable loss and LAE development was $3.0 million, primarily as a result of favorable development of $22.4 million in Specialty, partially offset by unfavorable development of $16.6 million in Personal Lines and net unfavorable development of $2.8 million in Core Commercial. The favorable development in Specialty was primarily due to lower than expected losses of $11.4 million in the Professional and Executive division, primarily in accident years 2019 through 2022 and, to a lesser extent, lower than expected losses in the marine line in accident year 2022 and lower than expected losses in the surety line. The unfavorable development in Personal Lines was primarily due to higher than expected losses in the personal automobile line, within property damage coverages in accident year 2022, and higher than expected losses in the homeowners line in accident year 2022. The net unfavorable development in Core Commercial was primarily due to higher than expected losses within the monoline property and commercial automobile lines, partially offset by lower than expected losses in the commercial multiple peril and workers’ compensation lines.

For the three months ended March 31, 2022, net favorable loss and LAE development was $6.0 million, primarily as a result of favorable development of $13.2 million in Specialty and net favorable development of $6.4 million in Core Commercial, partially offset by unfavorable development of $13.6 million in Personal Lines. The favorable development in Specialty was primarily due to lower than expected losses within the marine, specialty industrial and commercial property, professional and executive, and surety lines. The favorable development in Core Commercial was primarily due to lower than expected losses in the workers’ compensation line. The unfavorable development in Personal Lines was due to higher than expected losses of $13.9 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.