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 internally and periodically evaluated with our independent actuary. Adjustments are made as experience develops and new information becomes known. Any such adjustments are included in income from 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, 2024 for additional information regarding our loss and loss adjustment expense development.

The following table provides the Company’s liability for unpaid loss and loss adjustment expenses, net of related amounts recoverable from reinsurers, for the three months ended March 31, 2025 and 2024.


	Three Months Ended March 31,
	2025			2024
	(in thousands)
Balance, beginning of period	$	651,309		$	673,994
Less amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses		112,742			119,746
Net balance, beginning of period		538,567			554,248
Add incurred related to:
Current accident year		48,908			48,597
Prior accident years		(8,749	)		(8,606	)
Total incurred		40,159			39,991
Less paid related to:
Current accident year		2,037			2,137
Prior accident years		47,225			41,522
Total paid		49,262			43,659
Net balance, end of period		529,464			550,580
Add amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses		110,501			117,479
Balance, end of period	$	639,965		$	668,059

The foregoing reconciliation reflects favorable development of the net reserves at March 31, 2025 and March 31, 2024. The favorable development reduced loss and loss adjustment expenses incurred by $8.7 million and $8.6 million in first quarter 2025 and 2024, 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 loss development both unfavorable and favorable. The favorable loss development we experienced across accident years was largely due to two factors: (1) lower than expected severity of injuries in these accident years compared to our original and revised estimates; and (2) favorable case reserve development from closed claims and claims where the worker had reached maximum medical improvement. We believe the favorable case reserve development resulted primarily from an intensive claims management focus with the Company actively seeking to settle claims.

The table below presents the change in the allowance for credit losses on amounts recoverable from reinsurers for the three months ended March 31, 2025 and 2024.


	Three Months Ended
	March 31,
	2025			2024
	(in thousands)
Balance, beginning of period	$	300		$	360
Provision for credit loss benefit		(6	)		(51	)
Balance, end of period	$	294		$	309