
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance at beginning of period	$	186,349	$	278,658	$	346,216	$	322,465
Less: Reinsurance recoverable	(18,972)		(113,157)		(115,860)		(119,522)
Net balance at beginning of period	167,377		165,501		230,356		202,943
Incurred related to:
Current year	327,729		176,092		708,774		480,782
Prior years	2,715		11,489		7,080		17,983
Total incurred	330,444		187,581		715,854		498,765
Paid related to:
Current year	216,735		180,473		453,350		386,302
Prior years	57,227		42,841		269,001		185,638
Total paid	273,962		223,314		722,351		571,940
Net balance at end of period	223,859		129,768		223,859		129,768
Plus: Reinsurance recoverable	929,768		82,720		929,768		82,720
Balance at end of period	$	1,153,627	$	212,488	$	1,153,627	$	212,488

In late September 2022, Hurricane Ian made landfall on the Gulf Coast of Florida, continued across the state into the Atlantic Ocean and then made a second landfall in South Carolina. Current estimates for UVE’s gross ultimate loss is approximately $1 billion, well below its $3 billion reinsurance tower, with projected net exposure limited to retentions at its insurance and captive insurance entity subsidiaries. Estimated net losses and LAE exposure to the Insurance Entities, after estimated reinsurance recoveries, is $45 million. The Insurance Entities’ reinsurance recoveries include losses and LAE recoveries of $66 million from UVE’s prefunded captive insurance arrangement which is eliminated in consolidation. In total, net losses from Hurricane Ian, including losses and LAE incurred under the funded captive insurance arrangement, is currently estimated to be $111 million.

During the three months ended September 30, 2022, there was adverse prior years’ reserve development of $26.4 million gross, less $23.7 million ceded, resulting in $2.7 million net unfavorable development. The direct and net prior years’ reserve development for the quarter ended September 30, 2022 was principally due to gross reserve development on Hurricane Irma.

During the three months ended September 30, 2021, there was adverse prior years’ reserve development of $87.9 million gross, less $76.4 million ceded, resulting in $11.5 million net development. The direct and net prior years’ reserve development for the quarter ended September 30, 2021 was principally due to a direct increase in the ultimate losses for hurricanes of $81.7 million offset by ceded hurricane losses of $76.4 million resulting in net unfavorable development of $5.3 million. Direct losses increased for Hurricanes Irma and Sally. Excluding hurricanes, there was $6.2 million of direct and net prior years’ reserve development for the quarter ended September 30, 2021. This development, from the 2019 and prior accident years, resulted from the settlement on litigated claims exceeding prior estimated amounts.

During the nine months ended September 30, 2022, there was adverse prior years’ reserve development of $100.6 million gross, less $93.5 million ceded, resulting in $7.1 million net development. The direct and net prior years’ reserve development for the nine months ended September 30, 2022 was principally due to a gross reserve development on Hurricane Irma of $76.2 million, of which $69.2 million was ceded, resulting in net development on Hurricane Irma of $7.0 million in the period. Additionally, the Company concluded a favorable commutation during the quarter, favorably increasing ceded prior year loss payments which was offset by a provisory direct prior year IBNR amount, resulting in no net effect. Hurricane Matthew direct and net losses increased $0.1 million.

During the nine months ended September 30, 2021, there was adverse prior years’ reserve development of $296.9 million gross, less $278.9 million ceded, resulting in $18.0 million net development. The direct and net prior year reserve development for the nine months ended September 30, 2021 was principally due to a direct increase in the ultimate losses for several hurricanes of $282.9 million offset by ceded hurricane losses of $278.9 million resulting in net unfavorable reserve development of $4.0 million. Direct losses increased for Hurricanes Irma, Sally, Michael and Matthew. Excluding hurricanes, there was $14.0 million of direct and net prior years’ reserve development for the nine months ended September 30, 2021. This development, primarily from the 2019 and prior accident years, resulted from the settlement on litigated claims exceeding prior estimated amounts.