9.	Loss and Loss Adjustment Expenses

The following table provides a reconciliation of the beginning and ending reserve balances, net of related amounts recoverable from reinsurers, for 2015, 2014 and 2013:


	Year Ended December 31,
	2015			2014			2013
	(in thousands)
Balance, beginning of period	$	687,602		$	614,557		$	570,450
Less amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses		59,334			48,699			55,190

Net balance, beginning of period		628,268			565,858			515,260
Add incurred related to:
Current accident year		262,387			268,633			241,584
Prior accident years		(47,814	)		(23,717	)		(12,611	)

Total incurred		214,573			244,916			228,973
Less paid related to:
Current accident year		53,955			52,848			51,169
Prior accident years		135,711			129,658			127,206

Total paid		189,666			182,506			178,375

Net balance, end of period		653,175			628,268			565,858
Add amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses		64,858			59,334			48,699

Balance, end of period	$	718,033		$	687,602		$	614,557

The foregoing reconciliation reflects favorable development of the net reserves at December 31, 2015, 2014, and 2013. The favorable development reduced loss and loss adjustment expense incurred by $47.8 million in 2015 driven primarily by accident years 2012, 2013 and 2008 of $19.2 million, $8.2 million and $7.2 million, respectively. In 2014 and 2013, the Company recorded favorable development of $23.7 million and $12.6 million, respectively. The revisions to the Company’s reserves reflect new information gained by claims adjusters in the normal course of adjusting claims and is reflected in the financial statements when the information becomes available. It is typical for more serious claims to take several years or longer to settle and the Company continually revises estimates as more information about claimants’ medical conditions and potential disability becomes known and the claims get closer to being settled.

Reserves established for workers’ compensation insurance have included the exposure to occupational disease or accidents related to asbestos or environmental claims. The exposure to asbestos claims emanate from the direct sale of workers’ compensation insurance. These claims resulted from industry workers who were exposed to tremolite asbestos dust and electricians and carpenters who were exposed to products that contained asbestos. There has been no known exposure to asbestos claims arising from assumed business. The emergence of these claims is slow and highly unpredictable. The Company estimates full impact of the asbestos exposure by establishing full case basis reserves on all known losses. Reserves for losses incurred but not reported (IBNR) include a provision for development of reserves on reported losses. Reserves are established for loss adjustment expenses (LAE) associated with these case and IBNR loss reserves.

The following table details our exposures to various asbestos related claims:


	Year Ended December 31,
	2015			2014			2013
	(in thousands)
Reserves for loss and LAE at beginning of year	$	819		$	219		$	167
Incurred losses and LAE during the current year		444			882			53
Loss and LAE payments		(305	)		(282	)		(1	)

Reserves for loss and LAE at end of year	$	958		$	819		$	219

The Company has historically written general liability coverages that are reported in other liability lines of business. These coverages may be associated with the property and casualty industry’s exposure to environmental claims. However, the Company has not been notified by any insured for which exposure exists due to these types of claims. Company management believes potential exposure to environmental claims to be remote. Therefore, the Company has no loss or loss adjustment expense reserves for such liabilities.

The anticipated effect of inflation is implicitly considered when estimating liabilities for loss and loss adjustment expenses. Average severities are projected based on historical trends adjusted for implemented changes in underwriting standards, policy provisions and general economic trends. These anticipated trends are monitored based on actual development and are modified if necessary.