6.Reserves for Losses and Loss Adjustment Expenses:

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



	2019		2018
Balance at January 1	$	527,247	$	527,100
Less reinsurance recoverable		221,716		154,612
Net balance at January 1		305,531		372,488

Incurred related to:
Current year		301,265		250,075
Prior years		60,900		5,953
Total incurred		362,165		256,028

Paid related to:
Current year		127,610		90,640
Prior years		192,335		232,345
Total paid		319,945		322,985

Net balance at December 31		347,751		305,531
Plus reinsurance recoverable		272,604		221,716
Balance at December 31	$	620,355	$	527,247

The $60.9 million unfavorable net development and $6.0 million unfavorable net development in prior accident years recognized in 2019 and 2018, respectively, represent changes in our loss reserve estimates. In 2019 and 2018, the aggregate loss reserve estimates for prior years were increased to reflect unfavorable loss development when the available information indicated a reasonable likelihood that the ultimate losses would be more than the previous estimates. The unfavorable prior year reserve development during the twelve months ended December 31, 2019 was primarily driven by the continued emergence of increased frequency and severity trends in our primary commercial auto lines of business within our Commercial Auto business unit, which was representative of industry trends and unfavorable development in our general liability lines with our E&S Casualty business unit. The unfavorable prior year reserve development during the twelve months ended December 31, 2018 was primarily driven by the continued emergence of increased frequency and severity trends in our primary commercial auto lines of business within our Commercial Auto business unit, which was representative of industry trends, partially offset by net favorable development in our general liability lines within our E&S Casualty and Commercial Accounts business units. Generally, changes in reserves are caused by variations between actual experience and previous expectations and by reduced emphasis on the Bornhuetter-Ferguson method due to the aging of the accident years.

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


	December 31,
	2019		2018
Specialty Commercial Segment	$	60,138	$	16,457
Standard Commercial Segment		726		(8,993)
Personal Segment		36		(1,511)
Corporate		—		—
Total unfavorable net prior year development	$	60,900	$	5,953

The following describes the primary factors behind each segment’s prior accident year loss reserve development for the years ended December 31, 2019 and 2018:

Year ended December 31, 2019:

Specialty Commercial Segment. Our Commercial Auto business unit experienced net unfavorable development in the 2017 and prior accident years primarily in the commercial automobile liability line of business, partially offset by favorable development primarily in the commercial automobile line of business in the 2018 accident year. Our E&S Casualty business unit experienced net unfavorable development primarily in our E&S package insurance products in the 2018 and prior accident years. We experienced net favorable development in our E&S Property and Professional Liability business units, partially offset by net unfavorable development in our Aerospace & Programs business unit.

Standard Commercial Segment. Our Commercial Accounts business operating unit experienced net unfavorable development in the 2017, 2016, 2015 and 2013 and prior accident years primarily in the general liability line of business, partially offset by net favorable development primarily in the commercial property line of business in the 2018 and 2014 accident years and net favorable development primarily in the 2015 accident year in the occupational accident line of business. Our former Workers Compensation operating unit experienced net favorable development primarily in the 2015 accident year.

Personal Segment. Net unfavorable development in our Specialty Personal Lines business unit was mostly attributable to the 2018, 2016, 2014 and 2012 and prior accidents years, partially offset by favorable development in the 2017, 2015 and 2013 accident years.

Year ended December 31, 2018:

Specialty Commercial Segment. Our Commercial Auto business unit experienced net unfavorable development in the 2016 and prior accident years, partially offset by favorable development in the 2017 accident year. Our E&S Casualty business unit experienced net favorable development primarily in our E&S package insurance products. We experienced net unfavorable development in our E&S Property, Professional Liability and Aerospace & Programs business units,

Standard Commercial Segment. Our Commercial Accounts business 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 former 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 business unit was mostly attributable to the 2013 through 2017 accident years, partially offset by unfavorable development in the 2012 and prior accident years.

In the opinion of management, our reserves represent the best estimate of our ultimate liabilities, based on currently known facts, current law, current technology and assumptions considered reasonable where facts are not known. Due to the significant uncertainties and related management judgments, there can be no assurance that future favorable or unfavorable loss development, which may be material, will not occur.

Short-Duration Contract Disclosures

ASU 2015‑09, “Disclosures about Short-Duration Contracts (Topic 944)", requires insurers to make disclosures about their liability for unpaid claims and claim adjustment expenses for short-duration insurance contracts. These disclosures include tables showing incurred and paid claims development information (net of reinsurance and excluding unallocated loss adjustment expenses) which are disaggregated based on the characteristics of the insurance contracts that the insurer writes and other factors specific to the reporting entity. The information should be disclosed by accident year for the number of years claims typically remain outstanding, but need not be more than 10 years, including a reconciliation of the disaggregated information to the consolidated statement of financial position. We have evaluated the disaggregation criteria and concluded that the basis for our disaggregation of this information is the similar claim duration period of our primary lines of business (certain lines of business have short settlement periods versus long settlement periods).

Reserves for Incurred But Not Reported (“IBNR”) Claims

Reserves for IBNR claims are based on the estimated ultimate cost of settling claims, including the effects of inflation and other social and economic factors, using past experience adjusted for current trends and any other factors that would modify past experience. We use a variety of statistical and actuarial techniques to analyze current claims costs, including frequency and severity data and prevailing economic, social and legal factors. Each such method has its own set of assumptions and outputs, and each has strengths and weaknesses in different areas. Since no single estimation method is superior to another method in all situations, the methods and assumptions used to project loss reserves will vary by coverage and product. We use what we believe to be the most appropriate set of actuarial methods and assumptions for each product line grouping and coverage. While the loss projection methods may vary by product line and coverage, the general approach for calculating IBNR remains the same: ultimate losses are forecasted first, and that amount is reduced by the amount of cumulative paid claims and case reserves. Reserves established in prior years are adjusted as loss experience develops and new information becomes available. Adjustments to previously estimated reserves are reflected in the results of operations in the year in which they are made.

As described above, various actuarial methods are utilized to determine the reserves for losses and LAE recorded in our consolidated balance sheets. Weightings of methods at a detailed level may change from evaluation to evaluation based on a number of observations, measures, and time elements.

Methodology for Determining Cumulative Number of Reported Claims

A claim file is created when the Company is notified of an actual demand for payment, notified of an event that may lead to a demand for payment or it is determined that a demand for payment could possibly lead to a future demand for payment on another coverage on the same policy or on another policy.The cumulative number of reported claims is predominately measured at the claim level for our Commercial Accounts, Aviation, Personal, Primary Commercial Auto Liability, and certain Programs lines of business and at a coverage level by occurrence for our other lines of business. The Company does not generate claim counts for ceded business.

Incurred & Paid Claims Development Disclosures

The following tables provide information about incurred and cumulative paid losses and allocated loss adjustment expenses (“ALAE”), net of reinsurance for our primary lines of business with similar claims duration periods. The incurred and paid losses by accident year information presented for all lines of business with similar claim duration periods in the below tables for calendar years prior to 2017 is required supplementary information and is unaudited. The following tables also include IBNR reserves plus expected development on reported claims and the cumulative number of reported claims as of December 31, 2019 ($ in thousands):

Commercial Auto Liability


Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					As of December 31,
																							Cumulative
																							Number of
	For the Years Ended December 31,																						Reported
Accident	Unaudited																				IBNR		Claims
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		2019		2019
2010	$	38,276	$	44,052	$	44,597	$	46,338	$	46,097	$	46,557	$	46,637	$	46,805	$	46,944	$	44,402	$	—	2,656
2011				49,933		52,099		55,934		55,853		55,259		53,587		53,691		55,775		57,499		46	3,328
2012						60,844		69,628		68,225		71,515		73,153		75,464		75,657		76,333		45	4,932
2013								93,692		86,902		90,726		96,974		102,031		103,379		103,571		(417)	6,564
2014										102,053		93,187		99,280		106,138		113,357		116,373		(1,289)	7,308
2015												106,133		106,608		125,161		133,574		135,774		1,093	8,167
2016														111,913		115,044		121,714		137,690		2,352	8,771
2017																125,315		119,583		148,563		12,280	8,586
2018																		119,070		118,334		34,175	7,605
2019																				118,351		48,275	6,293
																		Total	$	1,056,890


Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident	Unaudited
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	7,476	$	23,464	$	32,807	$	41,298	$	44,818	$	45,544	$	46,487	$	46,607	$	46,604	$	47,125
2011				8,288		27,773		44,227		49,793		52,261		52,928		53,203		53,276		53,275
2012						12,859		30,046		46,510		59,883		69,026		72,907		75,190		75,039
2013								13,333		40,670		63,255		83,184		93,554		101,146		106,894
2014										17,145		43,078		67,410		88,823		107,912		112,617
2015												18,108		48,239		95,056		123,668		141,678
2016														19,788		53,398		106,707		129,761
2017																22,578		77,884		133,880
2018																		26,101		49,912
2019																				16,812
																		Total	$	866,994
								All outstanding liabilities before 2010, net of reinsurance												—
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	189,896

Casualty


Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					As of December 31,
																							Cumulative
																							Number of
	For the Years Ended December 31,																						Reported
Accident	Unaudited																				IBNR		Claims
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		2019		2019
2010	$	14,928	$	13,241	$	11,848	$	12,413	$	12,921	$	12,329	$	11,830	$	11,928	$	11,368	$	9,600	$	88	836
2011				14,331		11,675		12,942		12,529		11,855		11,510		11,407		11,265		11,660		144	714
2012						13,020		11,301		13,098		12,230		13,330		12,390		11,852		12,944		(318)	637
2013								13,379		12,002		12,384		12,792		12,874		12,205		13,330		(190)	618
2014										15,590		14,007		12,034		11,663		11,676		13,167		(49)	704
2015												17,362		16,746		15,046		15,266		15,945		247	726
2016														16,039		16,513		16,927		18,625		240	738
2017																17,845		15,751		20,360		2,900	1,123
2018																		23,056		24,590		2,930	1,739
2019																				34,610		26,946	2,277
																		Total	$	174,831


Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident	Unaudited
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	3,035	$	5,096	$	7,175	$	8,817	$	10,023	$	10,407	$	10,557	$	10,991	$	11,138	$	9,345
2011				2,340		4,292		6,007		8,334		9,292		9,642		9,868		11,149		11,204
2012						1,337		2,666		6,096		8,037		10,255		10,938		11,357		12,572
2013								1,331		3,190		5,461		9,212		11,134		11,866		12,255
2014										1,829		4,196		5,499		8,075		11,327		12,365
2015												1,420		4,133		8,258		13,553		16,158
2016														1,753		5,672		11,269		16,442
2017																2,900		5,884		11,268
2018																		2,708		8,027
2019																				2,526
																		Total	$	112,163
								All outstanding liabilities before 2010, net of reinsurance												860
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	63,528

Commercial Accounts


Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					As of December 31,
																							Cumulative
																							Number of
	For the Years Ended December 31,																						Reported
Accident	Unaudited																				IBNR		Claims
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		2019		2019
2010	$	45,263	$	45,235	$	44,847	$	43,164	$	43,459	$	42,426	$	42,175	$	42,880	$	42,427	$	40,337	$	106	3,143
2011				49,375		46,540		45,723		41,721		41,081		40,745		40,100		38,585		38,585		199	2,911
2012						47,194		48,085		44,625		42,632		41,451		40,350		38,669		38,669		198	2,703
2013								46,413		47,385		46,990		43,917		42,822		39,567		40,211		423	2,800
2014										46,280		46,470		43,806		43,806		43,673		42,463		562	2,737
2015												40,966		42,580		41,429		38,385		39,287		1,440	2,568
2016														43,327		43,449		41,983		43,111		1,518	2,526
2017																40,943		42,704		43,579		2,793	2,709
2018																		42,898		41,290		5,929	2,550
2019																				37,984		13,663	2,459
																		Total	$	405,517


Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident	Unaudited
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	21,304	$	28,342	$	30,957	$	33,428	$	37,166	$	39,115	$	39,706	$	40,937	$	42,063	$	40,040
2011				22,002		30,811		33,701		35,333		36,302		37,214		38,253		38,311		38,228
2012						22,264		30,096		32,378		34,597		35,943		37,808		38,044		38,211
2013								19,386		29,586		33,927		36,225		37,947		38,892		39,329
2014										21,322		31,150		33,544		36,775		39,185		41,162
2015												16,557		28,501		30,974		35,238		35,611
2016														19,776		29,456		35,035		39,417
2017																16,644		28,813		36,650
2018																		19,233		29,381
2019																				17,490
																		Total	$	355,519
								All outstanding liabilities before 2010, net of reinsurance												1,202
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	51,200

Aviation


Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					As of December 31,
																							Cumulative
																							Number of
	For the Years Ended December 31,																						Reported
Accident	Unaudited																				IBNR		Claims
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		2019		2019
2010	$	11,331	$	10,960	$	9,570	$	9,186	$	9,316	$	9,432	$	9,489	$	9,820	$	9,839	$	9,839	$	—	269
2011				12,330		11,299		9,759		9,729		9,829		9,884		10,045		10,028		10,028		—	305
2012						10,988		10,738		10,353		10,336		10,024		10,021		9,941		9,941		—	229
2013								10,236		11,304		10,295		9,563		10,057		10,649		10,252		—	231
2014										3,179		3,654		3,627		3,558		3,566		3,567		—	201
2015												1,870		1,709		1,643		1,631		1,630		—	197
2016														2,330		2,241		2,119		2,219		33	292
2017																2,325		2,082		2,079		26	319
2018																		2,382		1,990		143	332
2019																				5,246		836	265
																		Total	$	56,791


Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident	Unaudited
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	5,613	$	7,041	$	8,635	$	9,031	$	9,083	$	9,083	$	9,245	$	9,811	$	9,836	$	9,618
2011				6,313		8,894		8,924		9,311		9,546		9,628		10,028		10,028		10,028
2012						5,641		8,486		9,672		10,049		10,041		10,041		10,041		9,941
2013								6,537		9,493		9,584		9,356		9,944		10,456		10,242
2014										2,779		3,105		3,259		3,327		3,565		3,567
2015												958		1,405		1,520		1,601		1,630
2016														1,469		1,907		1,918		2,082
2017																1,260		1,837		2,021
2018																		1,716		2,237
2019																				2,911
																		Total	$	54,277
								All outstanding liabilities before 2010, net of reinsurance												—
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	2,514

Runoff


Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					As of December 31,
																							Cumulative
																							Number of
	For the Years Ended December 31,																						Reported
Accident	Unaudited																				IBNR		Claims
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		2019		2019
2010	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	—
2011				10,861		9,949		9,433		7,547		6,185		6,678		6,741		6,659		6,637		287	965
2012						4,804		4,469		3,597		3,358		2,821		2,636		2,752		2,752		70	661
2013								9,069		10,143		9,713		9,257		9,257		9,472		9,486		165	711
2014										9,208		9,338		9,762		10,076		10,452		10,463		460	1,130
2015												8,605		7,277		8,624		8,892		8,420		182	822
2016														3,553		4,733		4,365		4,416		29	599
2017																450		465		415		72	439
2018																		—		—		—	66
2019																				—		—	—
																		Total	$	42,590


Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident	Unaudited
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2011				2,897		4,308		5,208		4,968		4,838		5,227		5,427		5,483		5,357
2012						1,181		2,107		2,411		2,594		2,583		2,600		2,602		2,675
2013								3,737		6,825		7,882		8,350		8,809		8,961		9,010
2014										2,933		5,972		7,970		9,004		9,210		9,323
2015												2,528		5,744		7,328		8,049		8,495
2016														1,732		2,550		3,743		4,418
2017																111		171		203
2018																		—
2019
																		Total	$	39,481
								All outstanding liabilities before 2010, net of reinsurance												—
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	3,109

Programs


Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					As of December 31,
																							Cumulative
																							Number of
	For the Years Ended December 31,																						Reported
Accident	Unaudited																				IBNR		Claims
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		2019		2019
2010	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	-	$	—	—
2011				317		196		196		196		196		196		196		196		196		—	—
2012						3,001		2,045		2,045		3,885		2,045		2,045		2,045		2,045		—	3
2013								1,595		2,543		1,561		2,076		2,302		2,302		2,302		—	2
2014										1,623		666		2,039		1,575		1,575		1,575		—	5
2015												1,683		1,629		752		752		752		—	2
2016														478		1,200		1,178		1,178		—	1
2017																955		1,775		1,801		55	23
2018																		3,598		4,368		440	88
2019																				5,407		1,481	56
																		Total	$	19,624


Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident	Unaudited
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2011				196		196		196		196		196		196		196		196		196
2012						2,045		2,045		2,045		2,045		2,045		2,045		2,045		2,045
2013								1,489		1,561		1,561		2,076		2,302		2,302		2,302
2014										758		1,502		1,575		1,575		1,575		1,575
2015												1,515		1,629		752		752		752
2016														1,139		1,139		1,178		1,178
2017																36		1,556		1,551
2018																		911		1,290
2019																				4,501
																		Total	$	15,390
								All outstanding liabilities before 2010, net of reinsurance												—
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	4,234

Personal Segment


Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					As of December 31,
																							Cumulative
																							Number of
	For the Years Ended December 31,																						Reported
Accident	Unaudited																				IBNR		Claims
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		2019		2019
2010	$	63,862	$	78,294	$	80,765	$	84,724	$	83,903	$	84,252	$	84,591	$	84,808	$	84,867	$	84,867	$	32	30,180
2011				75,746		77,652		87,810		86,757		86,804		86,948		86,853		87,199		87,198		—	31,615
2012						58,604		73,795		70,552		71,513		72,042		72,037		72,076		72,100		—	23,940
2013								55,706		59,132		60,100		60,211		60,379		60,328		60,310		—	23,472
2014										5,452		5,340		6,243		6,699		6,504		6,518		—	19,293
2015												23,104		25,682		25,307		25,136		25,102		—	23,376
2016														32,260		32,893		32,728		32,803		27	23,752
2017																23,342		21,968		21,926		13	16,796
2018																		18,334		18,353		(191)	15,268
2019																				56,009		619	24,221
																		Total	$	465,186


Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident	Unaudited
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	38,643	$	67,755	$	75,199	$	82,624	$	83,511	$	84,111	$	84,556	$	84,717	$	84,768	$	84,782
2011				46,416		67,939		83,497		85,533		86,217		86,593		86,660		86,989		87,045
2012						37,860		64,278		68,849		70,807		71,995		72,055		72,094		72,124
2013								45,901		54,514		58,047		59,775		60,277		60,297		60,279
2014										2,515		4,418		5,631		6,428		6,566		6,580
2015												11,570		22,281		24,262		25,243		25,098
2016														21,669		30,646		32,260		32,777
2017																15,776		21,061		21,972
2018																		11,137		18,009
2019																				41,524
																		Total	$	450,190
								All outstanding liabilities before 2010, net of reinsurance												31
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	15,027

Property


Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance																					As of December 31,
																							Cumulative
																							Number of
	For the Years Ended December 31,																						Reported
Accident	Unaudited																				IBNR		Claims
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019		2019		2019
2010	$	9,652	$	9,836	$	9,680	$	9,656	$	9,668	$	9,654	$	9,675	$	9,700	$	9,496	$	9,501	$	—	1,316
2011				11,768		12,289		12,228		12,406		12,598		12,616		12,494		12,551		12,549		—	1,512
2012						18,518		17,541		18,119		17,743		17,768		18,005		17,974		17,963		—	1,629
2013								21,644		22,363		22,264		22,578		22,914		22,936		22,935		—	1,893
2014										22,551		21,950		21,862		21,793		21,852		21,876		(20)	2,037
2015												20,256		19,919		20,014		20,091		20,202		5	1,993
2016														20,734		22,838		22,632		22,789		(0)	2,029
2017																24,182		23,003		24,490		10	2,006
2018																		22,822		18,694		(649)	1,052
2019																				20,214		4,640	997
																		Total	$	191,214


Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
Accident	Unaudited
Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
2010	$	8,692	$	9,632	$	9,522	$	9,479	$	9,474	$	9,479	$	9,498	$	9,496	$	9,496	$	9,501
2011				10,317		12,354		12,343		12,370		12,492		12,541		12,550		12,551		12,549
2012						15,773		17,679		17,743		17,666		17,693		17,978		17,974		17,963
2013								17,785		21,452		21,864		22,197		22,826		22,936		22,935
2014										19,586		21,749		21,778		21,849		21,911		21,955
2015												17,513		19,500		19,928		20,134		19,953
2016														17,248		22,500		22,613		22,789
2017																18,703		22,059		23,821
2018																		10,923		16,914
2019																				11,344
																		Total	$	179,725
								All outstanding liabilities before 2010, net of reinsurance												—
				Liabilities for claims and claim adjustment expenses, net of reinsurance															$	11,489

The reconciliation of the net incurred and paid development tables to the liability for unpaid losses and LAE in our consolidated balance sheets is as follows (in thousands):


	2019		2018
Net outstanding liabilities for losses and LAE

Commercial Auto Liability	$	189,896	$	150,288
Casualty		63,528		61,014
Commercial Accounts		51,200		56,865
Aviation		2,514		2,185
Runoff		3,109		5,070
Programs		4,234		2,164
Personal Segment		15,027		8,743
Property		11,489		12,739
Liabilities for unpaid losses and allocated loss adjustment expenses, net of reinsurance		340,997		299,068

Reinsurance recoverable on unpaid losses and LAE
Commercial Auto Liability		112,931		23,262
Casualty		91,900		139,928
Commercial Accounts		13,671		8,255
Aviation		9,469		9,114
Runoff		1,326		1,528
Programs		3,618		421
Personal Segment		11,752		13,131
Property		27,937		26,077
Total reinsurance recoverable on unpaid losses and LAE		272,604		221,716

Unallocated loss adjustment expenses
Commercial Auto Liability		1,383		1,264
Casualty		760		707
Commercial Accounts		2,732		2,788
Aviation		85		383
Runoff		170		170
Programs		63		31
Personal Segment		1,250		955
Property		311		165
Total unallocated loss adjustment expenses		6,754		6,463
Total reserves for unpaid losses and loss adjustment expenses	$	620,355	$	527,247

Claims Duration

The following table provides supplementary unaudited information about the annual percentage payout of incurred losses and ALAE, net of reinsurance, as of December 31, 2019:


	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (1)
	Unaudited
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Commercial Auto Liability	14.5	%	25.6	%	26.3	%	16.3	%	10.0	%	3.6	%	2.6	%	0.1	%	—	%	1.0	%
Casualty	12.4	%	15.8	%	19.9	%	21.3	%	14.3	%	4.7	%	2.2	%	7.6	%	0.8	%	1.0	%
Commercial Accounts	36.8	%	16.8	%	5.8	%	6.3	%	5.8	%	7.0	%	5.7	%	2.8	%	6.9	%	6.1	%
Aviation	63.5	%	22.7	%	6.2	%	3.3	%	2.8	%	1.5	%	0.5	%	1.6	%	0.1	%	(2.2)	%
Runoff	31.9	%	37.8	%	17.6	%	6.9	%	4.2	%	1.4	%	1.5	%	(1.3)	%	—	%	—	%
Programs	73.2	%	20.3	%	6.5	%	—	%	—	%	—	%	—	%	—	%	—	%	—	%
Personal Segment	56.0	%	28.8	%	8.9	%	4.7	%	0.9	%	0.3	%	0.1	%	0.2	%	0.1	%	—	%
Property	77.2	%	15.8	%	1.7	%	0.5	%	3.6	%	1.2	%	—	%	—	%	—	%	—	%

(1)

The average annual percentage payout is calculated from a paid losses and ALAE development pattern based on an actuarial analysis of the paid losses and ALAE movements by accident year for each disaggregation category. The paid losses and ALAE development pattern provides the expected percentage of ultimate losses and ALAE to be paid in each year. The pattern considers all accident years included in the claims development tables.