6. UNPAID LOSSES AND SETTLEMENT EXPENSES

The following table is a reconciliation of the Company’s unpaid losses and settlement expenses:


	For the Three-Months Ended
	June 30,
(In thousands)	2020		2019
Unpaid losses and settlement expense - beginning of the period:
Gross	$	58,274	$	61,017
Less: Ceded		11,318		15,109
Net		46,956		45,908
Increase in incurred losses and settlement expense:
Current year		8,294		8,328
Prior years		914		573
Total incurred		9,208		8,901
Deduct: Loss and settlement expense payments for claims incurred:
Current year		4,444		2,799
Prior years		4,768		4,720
Total paid		9,212		7,519
Net unpaid losses and settlement expense - end of the period		46,952		47,290
Plus: Reinsurance recoverable on unpaid losses		19,463		13,974
Gross unpaid losses and settlement expense - end of the period	$	66,415	$	61,264



	For the Six-Months Ended
	June 30,
(In thousands)	2020		2019
Unpaid losses and settlement expense - beginning of the period:
Gross	$	56,838	$	51,447
Less: Ceded		11,036		6,736
Net		45,802		44,711
Increase in incurred losses and settlement expense:
Current year		14,540		16,687
Prior years		2,511		1,821
Total incurred		17,051		18,508
Deduct: Loss and settlement expense payments for claims incurred:
Current year		5,649		4,391
Prior years		10,252		11,538
Total paid		15,901		15,929
Net unpaid losses and settlement expense - end of the period		46,952		47,290
Plus: Reinsurance recoverable on unpaid losses		19,463		13,974
Gross unpaid losses and settlement expense - end of the period	$	66,415	$	61,264

Net unpaid losses and settlement expense decreased $338,000, or 0.7%, in the six months ended June 30, 2020 as compared to the same period in 2019. For the six months ended June 30, 2020 and 2019, we experienced unfavorable development of $2,511,000 and $1,821,000, respectively. The increase in unfavorable development for the three and six months ended June 30, 2020 was primarily driven by the Business Owners Liability and Business Owners Property lines of business. Business Owners Liability and Liquor Liability lines of business were the primary drivers of adverse development for the three and six months ended June 30, 2019.