Note 6. Loss Reserves

We record reserves for estimated losses under insurance policies that we write and for loss adjustment expenses related to the investigation and settlement of policy claims. Our reserves for loss and loss adjustment expenses represent the estimated cost of all reported and unreported loss and loss adjustment expenses incurred and unpaid as of a given point in time. The reserves for loss and loss adjustment expenses are estimated using individual case-basis valuations, statistical analyses and estimates based upon experience for unreported claims and their associated loss and loss adjustment expenses. Such estimates may be more or less than the amounts ultimately paid when the claims are settled. The estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in these estimates, management believes that the reserves for loss and loss adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. Any adjustments are included in current operations. See Note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for additional information regarding the Company’s loss and loss adjustment expense development.

The following table provides a rollforward of the liability for unpaid claims and claim adjustment expenses, net of related amounts recoverable from reinsurers, for six months ended June 30, 2017 and 2016:

	Six Months Ended June 30,
	2017			2016
	(in thousands)
Balance, beginning of period	$	742,776		$	718,033
Less amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses		78,256			64,858
Net balance, beginning of period		664,520			653,175
Add incurred related to:
Current accident year		119,828			126,764
Prior accident years		(17,184	)		(30,877	)
Total incurred		102,644			95,887
Less paid related to:
Current accident year		15,298			12,479
Prior accident years		80,571			79,437
Total paid		95,869			91,916
Net balance, end of period		671,295			657,146
Add amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses		78,464			68,403
Balance, end of period	$	749,759		$	725,549

The foregoing reconciliation reflects favorable development of the net reserves at June 30, 2017 and June 30, 2016. The favorable development reduced loss and loss adjustment expense incurred by $17.2 million and $30.9 million in 2017 and 2016, 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. Multiple factors can cause both favorable and unfavorable loss development. The favorable loss development we experienced across accident years was largely due to favorable case reserve development from closed claims and claims where the worker had reached maximum medical improvement.