4. HISTORICAL LOSS AND LAE DEVELOPMENT

The following table is a reconciliation of our unpaid losses and settlement expenses (LAE) for the first three months of 2019 and 2018.


	For the Three-Month Periods
	Ended March 31,
(in thousands)	2019		2018
Unpaid losses and LAE at beginning of year
Gross	$	1,461,348	$	1,271,503
Ceded		(364,999)		(301,991)
Net	$	1,096,349	$	969,512

Increase (decrease) in incurred losses and LAE
Current accident year	$	113,930	$	107,011
Prior accident years		(19,633)		(14,590)
Total incurred	$	94,297	$	92,421

Loss and LAE payments for claims incurred
Current accident year	$	(5,531)	$	(3,384)
Prior accident year		(70,145)		(64,121)
Total paid	$	(75,676)	$	(67,505)

Net unpaid losses and LAE at March 31,	$	1,114,970	$	994,428

Unpaid losses and LAE at March 31,
Gross	$	1,479,344	$	1,303,131
Ceded		(364,374)		(308,703)
Net	$	1,114,970	$	994,428

For the first three months of 2019, incurred losses and LAE included $19.6 million of favorable development on prior years’ loss reserves. The majority of products experienced modest amounts of favorable development on prior accident years, with notable contributions from general liability, commercial excess and personal umbrella, professional services and surety. Executive products was the exception and experienced adverse development.

For the first three months of 2018, incurred losses and LAE included $14.6 million of favorable development on prior years’ loss reserves. Commercial excess and personal umbrella, general liability and small commercial were drivers of the favorable development within the casualty segment. Property and surety segments also developed favorably, contributing to the decrease in incurred losses on prior accident years.