The table below sets forth a reconciliation of beginning and ending loss and LAE liability balances for 2018, 2017 and 2016. This table includes reserves, net of reinsurance recoverable, to correspond with the presentation in the Company's consolidated statements of operations, but also includes a reconciliation of beginning and ending loss and LAE liability, gross of reinsurance recoverable, as presented in the Company's consolidated balance sheets. All amounts are shown net of reinsurance, unless otherwise indicated. 2018 2017 2016 Reserves, gross of reinsurance recoverable, at the beginning of the year $ 680,274 $ 576,330 $ 513,596 Reinsurance recoverable on unpaid losses at the beginning of the year 308,143 251,563 211,843 Reserves at the beginning of the year 372,131 324,767 301,753 Provision for losses and loss expenses: Claims occurring during the current year 329,078 228,303 172,645 Claims occurring during prior years 16,786 19,215 13,836 Total incurred losses and loss expenses 345,864 247,518 186,481 Loss and loss expense payments: Claims occurring during the current year 84,738 67,234 54,239 Claims occurring during prior years 143,853 132,920 109,228 Total paid 228,591 200,154 163,467 Reserves at the end of the year 489,404 372,131 324,767 Reinsurance recoverable on unpaid losses at the end of the year 375,935 308,143 251,563 Reserves, gross of reinsurance recoverable, at the end of the year $ 865,339 $ 680,274 $ 576,330 The reconciliation above shows the Company's estimate of net losses on 2017 and prior accident years is approximately $16.8 million higher at December 31, 2018 than was provided in loss reserves at December 31, 2017 (referred to as a "reserve deficiency"). This compares to a $19.2 million reserve deficiency on prior accident years in 2017 and a $13.8 million reserve deficiency reported in 2016 related to prior accident years. The following table is a summary of the 2018 calendar year reserve deficiency by accident year (dollars in thousands): (1) Consists of development on cases known at December 31, 2017, losses reported which were previously unknown at December 31, 2017 (incurred but not reported), unallocated loss expense paid related to accident years 2017 and prior changes in the reserves for incurred but not reported losses and loss expenses. The savings shown in accident year 2017 in the table above reflect favorable loss development in both short-tail lines of business, such as physical damage, and the Company's independent contractor products (including non-trucking liability, occupational accident and workers' compensation).  The deficiencies in accident years 2014-2016 are largely the result of several severe transportation losses. The Company took action in all accident years to reflect new trends in loss development for commercial automobile products that have emerged over the last three years. These actions included case reserving reviews, as well as actuarial product reviews, and resulted in the reserve strengthening noted during the last three years. Bulk loss reserves are established to provide for potential future adverse development on cases known to the Company and for cases unknown at the reserve date. Changes in the reserves for incurred but not reported losses and loss expenses occur based upon information received on known and newly reported cases during the current year and the effect of that development on the application of standard actuarial methods used by the Company. - 6 - Years in Which Losses Were Incurred Reserve at December 31, 2017 (Savings) Deficiency Recorded During 2018 (1) % (Savings) Deficiency 2017 $ 161,069 $ (8,902 ) (5.5 )% 2016 66,652 4,259 6.4 % 2015 34,530 9,707 28.1 % 2014 30,129 11,970 39.7 % 2013 22,423 (1,382 ) (6.2 )% 2012 and prior 57,328 1,134 2.0 % $ 372,131 $ 16,786 4.5 %