Liability for Unpaid Claims and Claim Adjustment Expenses

The liability for unpaid claims and claim adjustment expenses (“claims”) for health and property and casualty insurance is included in “Policy and contract claims” in the consolidated statements of financial position and is the amount estimated for incurred but not reported (“IBNR”) claims and claims that have been reported but not settled. The liability for unpaid claims is estimated based upon American National’s historical experience and actuarial assumptions that consider the effects of current developments, anticipated trends and risk management programs, less anticipated salvage and subrogation. The effects of the changes are included in the consolidated results of operations in the period in which the changes occur. The time value of money is not taken into account for the purposes of calculating the liability for unpaid claims. There have been no significant changes in methodologies or assumptions used to calculate the liability for unpaid claims and claim adjustment expenses.

Information regarding the liability for unpaid claims is shown below (in thousands):



	Three months ended March 31,
	2019			2018
Unpaid claims balance, beginning	$	1,305,396		$	1,218,824
Less reinsurance recoverables	254,466			241,302
Net beginning balance	1,050,930			977,522
Incurred related to
Current	278,864			270,707
Prior years	(17,296		)	752
Total incurred claims	261,568			271,459
Paid claims related to
Current	93,273			93,852
Prior years	168,879			163,086
Total paid claims	262,152			256,938
Net balance	1,050,346			992,043
Plus reinsurance recoverables	244,098			222,635
Unpaid claims balance, ending	$	1,294,444		$	1,214,678

The net and gross reserve calculations have shown favorable development as a result of favorable loss emergence compared to what was implied by the loss development patterns used in the original estimation of losses in prior years. Estimates for ultimate incurred claims attributable to insured events of prior years decreased by approximately $17,296,000 during the first three months of 2019 and increased by approximately $752,000 during the same period in 2018. This was a reflection of lower-than-anticipated losses in the first three months of 2019 in the business owner and commercial package policy lines of business.

For short-duration health insurance claims, the total of IBNR plus expected development on reported claims included in the liability for unpaid claims and claim adjustment expenses at March 31, 2019 was approximately $29,539,000.