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 loss and LAE “development.” 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)	2024			2023
Gross reserve for losses and LAE, beginning of period	$	7,308.1		$	7,012.6
Reinsurance recoverable on unpaid losses		1,795.0			1,748.6
Net reserve for losses and LAE, beginning of period		5,513.1			5,264.0
Net incurred losses and LAE in respect of losses occurring in:
Current year		2,975.6			3,225.6
Prior years		(78.8	)		(6.8	)
Total incurred losses and LAE		2,896.8			3,218.8
Net payments of losses and LAE in respect of losses occurring in:
Current year		1,225.3			1,375.7
Prior years		1,517.5			1,523.8
Total payments		2,742.8			2,899.5
Net reserve for losses and LAE, end of period		5,667.1			5,583.3
Reinsurance recoverable on unpaid losses		1,759.7			1,746.5
Gross reserve for losses and LAE, end of period	$	7,426.8		$	7,329.8

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 $78.8 million and $6.8 million in 2024 and 2023, respectively.

For the nine months ended September 30, 2024, net favorable loss and LAE development was $78.8 million, primarily as a result of net favorable development of $39.7 million in Core Commercial, $34.8 million in Specialty and $4.3 million in Personal Lines. The favorable development in Core Commercial was primarily due to favorable catastrophe development of $24.8 million, primarily due to lower than expected losses related to events from accident years 2020 through 2023, including several convective storms across multiple states, Winter Storm Elliot, Hurricane Ian, and Hurricane Ida. Additionally, and to a lesser extent, Core Commercial favorable development resulted from lower than expected non-catastrophe losses across each of the main product lines: commercial multiple peril, commercial automobile, workers’ compensation and other commercial lines. Within non-catastrophe losses, lower than expected property losses of $25.6 million were partially offset by higher than expected losses of $10.7 million across several of the liability lines of business. The favorable development in Specialty was primarily due to lower than expected non-catastrophe losses in the Professional and Executive Lines division’s liability claims-made coverage of $14.1 million and, to a lesser extent, in the surety line. In addition, there was lower than expected catastrophe losses in our Marine and Specialty P&C divisions. The net favorable development in Personal Lines was primarily due to lower than expected non-catastrophe losses of $13.4 million in the personal automobile line within physical damage coverage. This favorable development was partially offset by higher than expected losses of $10.3 million in other personal lines within the standalone umbrella coverage.

For the nine months ended September 30, 2023, net favorable loss and LAE development was $6.8 million, primarily as a result of favorable development of $43.1 million in Specialty, partially offset by net unfavorable development of $35.1 million in Personal Lines and, to a lesser extent, net unfavorable development of $1.2 million in Core Commercial. The favorable development in Specialty was primarily due to lower than expected losses and LAE of $28.6 million in the Professional and Executive Lines division, primarily in accident years 2019 through 2022 and, to a lesser extent, lower than expected losses and LAE of $9.2 million in the surety line. The unfavorable development in Personal Lines was primarily due to higher than expected losses of $16.4 million within the personal automobile line, higher than expected losses of $11.4 million in the homeowners line, primarily in accident year 2022 due to Winter Storm Elliott and, to a lesser extent, higher than expected losses in the standalone personal umbrella coverage. The higher than expected losses in the personal automobile line were primarily within bodily injury in accident years 2018, 2019 and 2022, and within property damage coverages in accident years 2021 and 2022, partially offset by lower than expected losses within personal injury protection coverages in accident years 2021 through 2022. The net unfavorable development in Core Commercial was primarily due to higher than expected losses of $13.5 million within the commercial automobile line driven by higher bodily injury and personal injury protection losses in accident years 2014 through 2019 and, to a lesser extent, higher than expected losses in miscellaneous property and commercial umbrella coverages. The unfavorable development in Core Commercial was partially offset by lower than expected losses of $17.7 million within the workers’ compensation line, primarily in accident years 2013 through 2021, and within the commercial multiple peril line, primarily in accident year 2022, due to Winter Storm Elliott.