6. Reserves for Unpaid Losses and Loss Adjustment Expenses

Activity in the consolidated reserves for unpaid losses and LAE is summarized as follows (in thousands):


		September 30,		September 30,
		2018		2017

Balance at January 1	$	527,100	$	481,567
Less reinsurance recoverable		154,612		123,237
Net balance at January 1		372,488		358,330

Incurred related to:
Current year		185,506		184,685
Prior years		6,062		20,240
Total incurred		191,568		204,925

Paid related to:
Current year		56,687		61,288
Prior years		184,337		128,329
Total paid		241,024		189,617

Net balance at September 30		323,032		373,638
Plus reinsurance recoverable		207,784		157,861
Balance at September 30	$	530,816	$	531,499

The impact from the unfavorable (favorable) net prior years’ loss development on each reporting segment is presented below:


		Nine Months Ended September 30,
		2018		2017

Specialty Commercial Segment	$	15,730	$	17,824
Standard Commercial Segment		(8,829)		1,594
Personal Segment		(839)		822
Corporate		-		-
Total unfavorable (favorable) net prior years' development	$	6,062	$	20,240

The following describes the primary factors behind each segment’s prior accident year reserve development for the nine months ended September 30, 2018 and 2017:

Nine months ended September 30, 2018:

Specialty Commercial Segment. Our Contract Binding operating unit experienced net unfavorable development in the 2016 and prior accident years primarily in the commercial auto liability line of business, partially offset by favorable development primarily in the commercial auto and general liability lines of business in the 2017 accident year. Our Specialty Commercial operating unit experienced net unfavorable development in general aviation, commercial excess liability, satellite launch insurance products, primary/excess commercial property, professional liability and specialty risk programs lines of business.

Standard Commercial Segment. Our Standard Commercial P&C operating unit experienced net favorable development in the 2016 and prior accident years primarily in the general liability line of business, partially offset by net unfavorable development primarily in the commercial property line of business in the 2017 accident year and net unfavorable development in the 2017 and prior accident years in the occupational accident line of business. Our Workers Compensation operating unit experienced net favorable development in the 2016 and prior accident years.

Personal Segment. Net favorable development in our Specialty Personal Lines operating unit was mostly attributable to the 2013 through 2017 accident years, partially offset by unfavorable development in the 2012 and prior accident years.

Nine months ended September 30, 2017:

Specialty Commercial Segment. Our Contract Binding operating unit experienced net unfavorable development primarily in the commercial auto liability line of business in the 2015 and prior accident years, partially offset by favorable development in the 2016 accident year. Our Specialty Commercial operating unit experienced net unfavorable development in general aviation primarily in the 2010 accident year, commercial excess liability primarily in the 2013 accident year and specialty risk programs primarily in the 2015 and prior accident years, partially offset by net favorable development in the medical professional liability and primary/excess commercial property lines of business primarily in the 2016 accident years.

Standard Commercial Segment. Our Standard Commercial P&C operating unit experienced net unfavorable development in the 2016 and prior accident years in the occupational accident line of business, partially offset by net favorable development primarily in the general liability line of business in the 2016 and prior accident years.

Personal Segment. Net unfavorable development in our Specialty Personal Lines operating unit was mostly attributable to the 2016, 2014 and 2013 accident years, partially offset by favorable development in the 2015 accident year.