
Six Months Ended June 30,	2026		2025
	(in thousands)

Gross and net balance, beginning of period	$	153,250	$	156,396
Incurred related to:
Current year	1,156,700		718,649
Prior years	(6,444)		(2,830)
Total incurred	1,150,256		715,819
Paid related to:
Current year	927,521		586,926
Prior years	125,095		145,629
Total paid	1,052,616		732,555

Gross and net balance, end of period	$	250,890	$	139,660

The Company uses two methods of standard actuarial techniques to establish unpaid claims reserves. Management estimates are supported by the Company's actuarial analysis. The Company utilizes an internal actuarial team to review the adequacy of unpaid claim and unpaid claim adjustment expense. The estimation of claim costs is inherently difficult and requires significant judgment. The estimation has considerable inherent variability and can fluctuate significantly depending upon several factors, including medical cost trends and claim payment patterns, general economic conditions, and regulatory changes. The time value of money is not taken into account for the purposes of calculating the liability for unpaid claims. Management believes that the current reserves are adequate based on currently available information.

Unpaid claims for Insurance operations were $250.9 million at June 30, 2026. During the six months ended June 30, 2026, $125.1 million was paid for incurred claims attributable to insured events of prior years. A favorable development of $6.4 million was recognized during the six months ended June 30, 2026, resulting from the Company's actual experience with claims developing differently as compared to the Company's estimates at December 31, 2025. A favorable development of $2.8 million was recognized during the six months ended June 30, 2025, resulting from the Company's actual experience with claims developing differently as compared to the Company's estimates at December 31, 2024. Original estimates are increased or decreased, as additional information becomes known regarding individual claims. The ratio of current year medical claims paid as a percentage of current year net medical claims incurred was 80.2% for the six months ended June 30, 2026, and 81.7% for the six months ended June 30, 2025. This ratio serves as an indicator of claims processing speed, indicating that claims were processed at a slower rate during the six months ended June 30, 2026, than during the six months ended June 30, 2025.